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Cisco Announces Agreement to Acquire DVN Set-Top Box Business
SAN JOSE, CA and SHANGHAI, CHINA and HONG KONG, Nov 02, 2009 (MARKETWIRE via COMTEX) --
Cisco (NASDAQ: CSCO) today announced a definitive agreement to
acquire the set-top box business of DVN (Holdings) Limited (SEHK:
0500). Listed in Hong Kong with major operations in China, DVN is a
market and technology leader in digital cable solutions in China and
shares Cisco's vision of a high-performance, scalable and
services-rich cable interactive platform extending into every home.
Under the terms of the agreement, Cisco will pay up to $44.5 million
for the set-top box business of DVN. Of this amount, approximately
$17.5 million will be paid upfront, with an additional maximum amount
of $27 million to be paid over four years based on the achievement of
specific sales milestones. The acquisition is expected to close in
the first half of calendar year 2010 subject to standard closing
conditions, DVN shareholder approval and regulatory approvals.
In addition to the acquisition, Cisco has entered into a go-to-market
alliance with the remainder of the DVN organization -- which will
continue to be led by current DVN CEO Terry Lui -- in order to utilize
the company's middleware and advanced applications as well as
integration and support services. The alliance will provide joint
customers with unparalleled end-to-end capabilities through the
evolution from basic digital broadcast to advanced interactive
services.
"Cisco and DVN have similar cultures that emphasize video innovation
and a shared vision to enable multi-media connected homes across
China," said Ken Klaer, vice president and general manager,
International Cable Business Unit at Cisco. "With this acquisition,
we will offer customers the powerful combination of DVN's products
with the Cisco(R) IP Next-Generation Network (IP NGN) platform, and
Cisco will be well positioned to engage in the largest digital
transformation opportunity in the world today."
The Chinese cable market is currently the largest in the world with
160 million subscribers and is predicted to grow to as many as 200
million over the next three to five years. Currently, only about
one-third of the market has converted to digital cable. With the
Chinese government mandating full digitization by 2015, this
represents an important long-term opportunity for Cisco.
"Cisco's global technology leadership and breadth of services
combined with DVN's market-leading solutions and talented employee
base will ensure that Chinese consumers continue to receive superior
digital services today and are provided with world-class advanced
technologies moving forward," said DVN CEO Terry Lui. "Cisco has
demonstrated a strong commitment to the Chinese market, and I look
forward to working with them as part of our ongoing alliance."
Between the signing of the agreement and the close of the
acquisition, Cisco and DVN's set-top box businesses will continue to
operate as separate companies. Upon completion of the transaction,
the DVN set-top box business will become a part of the International
Cable Business Unit within the Service Provider Video Technology
Group (SPVTG) at Cisco led by Klaer. Under the terms of the
agreement, the two companies expect to work together with the aim of
providing uninterrupted service to set-top box customers and to
prepare for an orderly transfer of the business.
The DVN business will run end-to-end from within China -- from
design, sourcing and logistics through to marketing, sales and
service. This is an important milestone for Cisco, not only in
China, but for a broader strategy toward competing in emerging
markets with locally designed and produced solutions.
The investment is part of Cisco's ongoing long-term commitment to
China and its belief in cultivating local innovation and talent. In
April of this year Cisco introduced a "cultivated innovation" model
aimed at boosting local innovation through capital, technology,
process expertise, incubation resources and leadership investments.
About Cisco
Cisco (NASDAQ: CSCO) is the worldwide leader in networking that
transforms how people connect, communicate and collaborate.
Information about Cisco can be found at http://www.cisco.com. For
ongoing news, please go to http://newsroom.cisco.com.
About DVN
DVN (Holdings) Limited (SEHK: 0500) is one of the largest digital TV
broadcasting systems integrators in China engaged in the design,
development, integration and sales of digital set-top boxes, smart
cards, conditional access systems, digital broadcasting systems and
related software. For more information about DVN, please go to
www.dvnholdings.com and www.dvnchina.com.
Cisco, the Cisco logo and Cisco Systems are registered trademarks or
trademarks of Cisco Systems, Inc. and/or its affiliates in the United
States and certain other countries. All other trademarks mentioned in
this document are the property of their respective owners. The use of
the word partner does not imply a partnership relationship between
Cisco and any other company.
This document is Cisco Public Information.
Forward-Looking Statements
This release may be deemed to contain forward-looking statements,
which are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including the expected
completion of the acquisition and the time frame in which this will
occur, the expected benefits to Cisco and others from completing the
acquisition, the development of relevant markets and the impact of
the combined company with respect to such markets, and plans
regarding DVN personnel. Readers are cautioned that these
forward-looking statements are only predictions and may differ
materially from actual future events or results due to a variety of
factors, including, among other things, the retention of employees of
DVN and the ability of Cisco to successfully integrate DVN and to
achieve expected benefits, business and economic conditions, growth
trends in the networking industry and relevant markets, global
economic conditions and other risk factors set forth in Cisco's most
recent report on Form 10-K filed with the SEC on September 11, 2009.
Any forward-looking statements in this release are based on limited
information currently available to Cisco, which is subject to change,
and Cisco will not necessarily update the information.
For direct RSS Feeds of all Cisco news, please visit "News@Cisco" at
the following link:
http://newsroom.cisco.com/dlls/rss.html
Press Contact:
China:
Sophy Zhang
+86 10 8515 5662
sopzhang@cisco.com
US:
Kristin Carvell
(408) 424-0206
kcarvell@cisco.com
Analyst Contact:
Ben Culp
(949) 823-3787
beculp@cisco.com
Investor Relations Contact:
Matt Tractenberg
(408) 525-3170
matthew2@cisco.com
SOURCE: Cisco
mailto:sopzhang@cisco.com
mailto:kcarvell@cisco.com
mailto:beculp@cisco.com
mailto:matthew2@cisco.com
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