SeaChange International, the video-on-demand systems provider, has acquired the On Demand Group, the movie and programming aggregator and video-on-demand service operator based in London.

On Demand Group provides movies and other television programming for cable operators NTL and Telewest in the UK and has been seeking to expand in Europe.

Formed in 1995, On Demand Group has 50 employees and a turnover of around $10 million. SeaChange originally entered into a non-exclusive strategic partnership with the company in 2002, investing $3 million for 28% ownership.

SeaChange paid around $13.4 million for the remaining 72% of the On Demand Group that it did not previously own, making it a wholly-owned subsidiary.

Taking into account around $6 million that On Demand Group has in the bank, the actual cost to SeaChange is nearer $7 million, with future earnout payments taking that up to $17 million at most.

SeaChange will also acquire their equal interest in the FilmFlex venture with Sony Pictures and Walt Disney, which provides programming from the libraries of a large number of Hollywood distributors.

In April, SeaChange spent $25.5 million on acquiring rights to the Liberate middleware currently used to deliver interactive and video-on-demand services on cable television in the UK, and has also invested in Minerva Networks and licensed its software for interactive television services.

“The On Demand Group is a significant addition to SeaChange, providing a strategic benefit to our on-demand market offering,” said Bill Styslinger, president and chief executive of SeaChange International.

The aim is to offer an end-to-end turnkey solution to make it easy for operators to deploy on-demand services.

“We are delighted with the acquisition by SeaChange because it enables us to offer a completely integrated one-stop solution, from server provision and content acquisition, to service development and operating experience for any cable or telco company internationally that is maximising the triple play opportunity of television, internet access, and telephony,” said Tony Kelly, founder and chief executive of the On Demand Group. “To attack the opportunities in Europe we needed additional resources and finance at a time when the opportunity is almost exploding.”