announce that the companies have reached an agreement under which Pace proposes to acquire 2Wire for cash consideration of $475 million. The consideration includes 2Wire's balance sheet cash at closing, expected to be approximately $55 million.
Neil Gaydon, Chief Executive Officer of Pace plc, commented:
"This acquisition will strengthen our Americas business, extending Pace's US market coverage with entry into the tier one telco market. We have built a strong position in the US with cable and satellite operators and 2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of US operator requirements. 2Wire's software and gateway expertise will further drive development of our home entertainment convergence strategy. The transaction introduces deep client relationships with important customers including AT&T and further develops our platform to deliver ongoing sustainable growth."
"We admire 2Wire's technology and the position they have built as an acknowledged leader in the telco gateway market. We look forward to working together."
Pasquale Romano, Chief Executive Officer of 2Wire, added:
"Pace is an excellent strategic fit for the 2Wire business and will enable us to take our products and services to the next level of their development. The combined customer base, engineering capability and product breadth of Pace and 2Wire make this a compelling transaction for our customers, our employees and our end users globally."
Tim Harden, President - Supply Chain and Fleet Operations, AT&T, commented:
"AT&T looks forward to continuing our working relationship with 2Wire under Pace's ownership."
Following the completion of the acquisition, Pace, already the number one global digital set-top box company, would also become the number one provider of telco residential gateway devices in the US and the number three provider globally.
2Wire is currently owned by a consortium of strategic and financial investors including Alcatel-Lucent, AT&T, Telmex, Oak Investment Partners, Meritech Capital Partners, and Technology Crossover Ventures.
The transaction is conditional on (amongst other things) the approval of the shareholders of Pace and 2Wire and regulatory approvals. It is anticipated that the transaction will be completed during the fourth quarter of 2010.