The Kudelski Group of companies, which includes the content security provider NagraStar it jointly owns with EchoStar, has signed an agreement with Liberty Media Corporation to acquire voting control of interactive television software company OpenTV for $132 million.
The Swiss Kudelski Group will acquire 27% of the economic interest and 75% of the voting interest in OpenTV, subject to closing conditions and regulatory approval. As part of the deal, OpenTV will also receive nearly $20 million in cash from Liberty Media.
The companies say that they will be able to deliver fully integrated products and solutions to digital television operators, across conditional access, middleware, applications and advertising systems. They will also continue to operate independently, serving some customers separately. OpenTV will maintain its listing on the NASDAQ stock market.
“Aligning ourselves with a global leader in the digital television sector like Kudelski will help us immediately extend our product lineup into new markets and give us access to customers we haven’t had relationships with before,” said Jim Chiddix, the chairman and chief executive of OpenTV. “It will also open up new opportunities that we may not otherwise have had the technical or related resources to address in the near term.”
The OpenTV chairman said the deal will offer new opportunities to bundle solutions, and collaborate more effectively in other areas, such as the digital terrestrial television market.
“Operators are being driven to replace first generation set-top boxes and as they do so they have to make big platform decisions and incorporate new features such as PVR, HDTV and MPEG-4 compression,” Chiddix told analysts. “They are also beginning to take into account, one way or another, new distribution technologies including digital terrestrial, IPTV and mobile.”
OpenTV was not a direct party to the agreement and upon conclusion of the deal, Alan Guggenheim, currently chief executive of NagraStar, is expected to replace Jim Chiddix who will assume the role of vice chairman.
“This transaction was driven, in large part, by recognition of OpenTV’s leadership position in advanced digital television and our desire to work more closely with OpenTV to capture additional market share in the rapidly consolidating digital television industry,” said Andre Kudelski, the chairman and chief executive of Kudelski Group.
OpenTV competes with News Corporation company NDS in the middleware market. NDS, which powers News Corp controlled DIRECTV, is a leading provider of content protection systems.
By aligning with Kudelski, OpenTV gains an alliance with NagraStar, which provides content protection systems to the EchoStar Dish Network.