Harmonic plans to acquire the video networking software business of Entone Technologies for $45 million. The addition of video software systems will enable Harmonic to offer an integrated delivery solution for the next generation of both broadcast and broadband network based video services.

Entone Technologies is a privately-held company based in California, with research and development facilities in Hong Kong. Its software solutions encompass video ingest, management and streaming for personalised video-on-demand, network-based storage and targeted advertising services.

Harmonic, also headquartered in California, perhaps best known for its digital video encoders, will purchase the software business for $45 million, comprising $26 million in cash and the balance in shares. Harmonic will also invest $2.5 million in Entone’s consumer premise equipment, which will be spun out to the existing shareholders of the company.

“Our industry is in the midst of an exciting and fundamental transformation to an increasingly on-demand video experience,” said Patrick Harshman, president and chief executive of Harmonic. “By bringing together Harmonic’s market-leading encoding and stream processing products and Entone’s innovative software suite for managing and streaming personalized video content, we will create a powerful and integrated solution for the emerging on-demand network.”

“Harmonic is an excellent fit for Entone both in terms of the customers we serve and the synergy of our respective product lines,” said Steve McKay, the chief executive of Entone.

The proposed purchase of Entone is the latest in a wave of mergers and acquisitions across the industry as companies consolidate their resources.