LONDON (Alliance News) - PayTV and Broadband technology company Pace PLC Wednesday said it will buy broadband network equipment maker Aurora Networks Inc for USD310 million, a deal it expects to significantly boost earnings from 2014 and provide USD8 million in annual synergies.
The maker of items like set-top boxes said the acquisition will allow to meet a "constant" demand from cable provider customers for cheap increases in broadband bandwidth.
"Acquiring Aurora will allow Pace to expand beyond our core business and build deeper and more embedded relationships with our customers, which the Company believes will strengthen Pace's position as a market leading solutions provider for the PayTV and broadband industries," Pace Chairman Allan Leighton said in a statement.
It will pay a further USD13 million when the deal closes for tax benefits that it expects to recover in the three years after the acquisition.
The company said trading in the last three-and-a-half months had shown good progress, and it reiterated its full-year guidance for revenues to be broadly in line with 2012, its operating margin to be above 7.5% and for strong cash flow to continue.
Strong cashflow in recent months, combined with a reduction in working capital, means it now has a net cash position compared with the USD322 million in debt it was holding at the end of 2012.
It will release an interim management statement with more details on trading November 14.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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