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S-A to buy BarcoNet for $154 M in cash

Sun, 11/11/2001 - 7:00pm
Anne Kerven

Scientific-Atlanta will purchase Brussels, Belgium-based BarcoNet NV for about $154 million in cash. The company says the purchase will accelerate and build its European presence.

Under the deal, S-A will launch a public tender offer for all outstanding BarcoNet stock with all outstanding options, warrants and convertible securities, it says, adding that major shareholders of about 40 percent of BarcoNet's outstanding shares already have started selling their shares to S-A.

S-A spokesman Paul Sims wouldn't comment on personnel plans or on what would happen with BarcoNet's management. The acquisition was based in part of "bringing on board critical human resources across all functional areas."

The company also saw few redundancies, he says. "We believe there is a potential for significant cost and revenue synergies," he says. Cost savings from the purchase will be in the form of an integrated back office, elimination of public company costs, consolidation of facilities and personnel, and reduced procurement costs, he adds.

BarcoNet provides multimedia distribution systems for broadband and broadcast, including headends for integrated multimedia services, high-speed digital fiber optic backbones, network management and digital TV distribution. Its 2001 revenue reached $98 million, and it has more than 20 offices worldwide. Simms says 90 percent of its business is international, with 10 percent in North America.

"BarcoNet's customer base, sales channels and product offering is very complementary to our worldwide transmission business — not just in Europe," Sims says. BarcoNet's transmission business includes headends, digital encoders, optical transmitters, network management and services.

"They have been successful in winning contracts to supply digital headends to European MSOs like NTL," he says. "It could be an obvious fit to sell both the Scientific-Atlanta Explorer digital network and BarcoNet digital headend."

S-A retained Deutsche Banc Alex. Brown as its advisor and BarcoNet was advised by Dresdner Kleinwort Wasserstein and Petercam.

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