ActiveVideo Networks has strengthened its interactive TV hand with today’s announcement that it has reached an agreement to buy Avinity Systems BV, which also builds iTV tools and applications.

Once the deal is completed, it will blend the two providers of cloud-based interactive TV platforms and applications.

Financial terms of the agreement weren’t released.

The transaction, which was announced at the Anga show in Germany, strengthens ActiveVideo Networks’ technology and application offerings and gives it more of a global presence in the market for delivery of cloud-based services to televisions around the world. 

The acquisition combines two companies that will have deployed interactive services to more than 5 million homes worldwide by the end of this year. Post-acquisition, ActiveVideo Networks said it would have publicly disclosed deployments with a wide variety of service providers, including Time Warner Cable’s Oceanic division and Grande Communications in the United States, Tele2 and Reggefiber in Europe, and PCCW in Hong Kong. 

ActiveVideo said the deal would also expand its list of content relationships and middleware and infrastructure integrations.

“The two companies were pursuing the same vision on different continents,” said Gary Lauder, chairman of ActiveVideo. “Fortunately, their strengths and technological assets are very complementary. Due to that, and the Avinity team’s high caliber, we expect everyone to be retained and to be a vital part of our global expansion.”

ActiveVideo and Avinity have consistently advocated that the future of content delivery, including video-on-demand navigation, Web-based video, interactive advertising and other services, will be driven by server-based technologies. Both platforms use an ultra-thin client in the set-top box to pass user keystrokes to servers in the network. 

The servers create compressed video streams in response to user interaction and unicast them over IP or cable back to the home to be decoded and displayed by the set-top box.  When combined, the ActiveVideo and Avinity RenderCast platforms will be capable of delivering Web-like personalization and interactivity to a worldwide television audience through both legacy and next-generation digital set-top boxes and broadband-connected devices.

In conjunction with the acquisition, ActiveVideo’s European operations will be relocated to Avinity’s headquarters in Hilversum, near Amsterdam in the Netherlands. Ronald Brockmann, director of Avinity, will serve as managing director for ActiveVideo Europe. 

Avinity Systems and Neotion announced yesterday at the Anga show that they had integrated their respective product offerings.

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