Advertisement to expand global reach via Philips Broadband buy

Wed, 07/31/2002 - 8:00pm
Staff has struck a deal valued at about $78 million to snap-up Philips Broadband Networks (PBN), a move that is expected to widen's international scope by three-fold.

The deal, expected to close by the second half of this year, will add about $100 million in annual accretive revenue, Chairman and CEO David Woodle said. He said that the addition of PBN will allow to triple its international business. PBN is a division of consumer electronics giant Royal Philips Electronics.

Woodle said some PBN products are complementary to's, but expects that combining the two companies will allow to build optical and RF systems faster than it could on its own.

PBN makes both optical and RF (radio frequency) transmission equipment for cable operators, including nodes, network amplifiers, line extenders and network "optimizing" technologies such as dense wave division multiplexing (DWDM). About half of the division's business comes from U.S. operators, with the rest largely spread across Europe, including France and Spain, and the Asia Pacific Region.

The deal essentially ends Philips' foray into the transmission side of the cable broadband sector. Though Philips' PBN unit has developed some domestic cable business, the consumer electronics division of Philips has not had as much success selling digital set-tops to U.S. MSOs, and has pulled back its efforts there, including a deal with AT&T Broadband to deliver 1 million advanced boxes.

Woodle said and PBN expect to complete most of the integration of the two companies before the end of 2002. During that time, Woodle said his company will determine which PBN products add to's portfolio, and which ones potentially overlap existing products.


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