Canadian company Espial, which provides browser based clients and middleware for internet protocol television services, is to acquire California based video server and middleware company Kasenna in a stock deal worth just $6.5 million. Over $70 million has been invested in Kasenna since it was founded in 2000, coming out of Silicon Graphics. The consolidation reflects competition from larger players.

Jaison Dolvane, the chief executive of Espial, said the combined company would benefit. “The IPTV market remains early and fragmented, and service providers are looking for clear leaders that they can bet on,” he said. “Acquiring Kasenna provides us with increased scale, expertise, product breadth and channel access to position ourselves as the leading choice for service providers worldwide.”

The footprint of the combined companies covers over a hundred customers and around 2.4 million licenses.

The company will offer integrated systems as well as component products for IPTV and hybrid video systems, as well as partnering with third party middleware and video-on-demand vendors.

“The combined depth and strength of our product portfolios, customers, partners and channel relationships, provides the right attributes to create an industry leader,” said Vivek Pendharkar, the chief executive of Kasenna. “Kasenna investors believe this merger creates a winning combination and agreed to a majority share transaction in order to participate in the growth of Espial.”

Upon completion of the acquisition, Espial will have seven directors, six of whom will be the current directors of Espial, with one being a nominee of the shareholders of Kasenna.