Ericsson to buy Envivio

Ericsson (NASDAQ:ERIC) says it has agreed to buy software-based video encoding company Envivio (NASDAQ:ENVI) for $4.10 per share in cash (approximately $125 million total). If consummated, a goal Ericsson hopes to reach in the fourth quarter of this year, the deal would strengthen Ericsson's hand in video compression by enabling it to provide a range of both software- and hardware-based offerings, the company believes. Envivio serves more than 400 TV service provider and content owner customers globally, Ericsson says. They include Comcast, Cox Communications, Liberty Global, Sky, Telstra, and Time Warner Cable. The San Francisco-based company generated revenues of $43 million in 2014 employees approximately 200 people worldwide. The company's cloud-based products perform software-based video encoding/transcoding, processing, packaging, and ad insertion via Intel-based appliances or IT blade servers (see, for example, "Envivio Intros All-Software Headend,""Envivio Encoding French Open in 4K," and "Envivio Upgrades Compression Software"). A block of Envivio's major stockholders, collectively owning approximately 34% of Envivio's outstanding common stock, have agreed to support the merger and the tender offer. The board of directors of Envivio has unanimously agreed to recommend that Envivio's stockholders tender their shares to Ericsson in the tender offer as well. Once acquired, Ericsson will report the new assets as part of Segment Support Solutions.