Amino To Acquire Set-Top Box Division From Tilgin AB

Thursday, November 20th, 2008
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Amino Technologies plc (“Amino” or the “Group”; AIM: AMO), the Cambridge-based broadband network software and systems group, is pleased to announce that today, in line with the Group’s strategy, it has signed a sales and purchase agreement for the acquisition of Tilgin AB’s IPTV set-top box division (“Tilgin IPTV”). Completion of the acquisition is expected to occur on 1 December 2008.

Tilgin IPTV has been acquired for an initial consideration of SEK 30.0 million (approximately £2.5 million) on a debt-free basis, payable in cash on completion. Additionally, there is a capped cash earn-out mechanism offering an additional maximum consideration of SEK 15.0 million (approximately £1.25 million) based on unit sales above 175,000 in financial year 2009. The consideration will be satisfied by Amino out of its existing cash resources which at 31 May 2008 stood at £19.0 million.

The purchase of Tilgin IPTV, a business offering a range of MPEG-4 HD IPTV set-top boxes within its “Mood” product line, further complements Amino’s award-winning product portfolio and adds new software functionality across its entire range. These include picture-in-picture, whole-home connectivity and green-power: all features designed to satisfy a growing market demand. The acquisition will also give Amino immediate access to additional middleware solutions – such as Ericsson and Nokia Siemens Networks – as well as extending the Group’s customer reach. Amino expects to enjoy R&D cost synergies delivered through the development and maintenance of common STMicroelectronics-based set-top boxes.

Based in Kista (north of Stockholm), Sweden, Tilgin IPTV is a leading edge technology player within the European IPTV market with a proven record in delivering large quantities of products and advanced systems having sold and delivered almost 500,000 set-top boxes. Tilgin IPTV has 36 experienced employees.

Management accounts for Tilgin’s IPTV business show that in the year to 31 December 2007, the business generated revenues of SEK 254.0 million (approximately £21.0 million) through 146,000 unit shipments and incurred an operating loss of SEK 42.0 million (approximately £3.5 million). Following the loss of a major customer, Tilgin IPTV’s sales in 2008 are expected to be materially less. On completion, Tilgin IPTV will have net assets totalling SEK 6.0 million (approximately £0.5 million) and goodwill on acquisition is expected to total SEK 24.0 million (approximately £2.2 million).

Once integration of technologies is complete, initial cost synergies should be realised in H2 2009 when Amino expects the acquisition to be earnings enhancing. Full synergies will be realised from 2010 onwards.

Commenting on the acquisition, Keith Todd, Amino’s Chairman, said: “The acquisition of Tilgin IPTV demonstrates further strategic growth from Amino. Amino’s strong market position makes it the ideal consolidator in a market which is both growing and maturing. We are confident that the acquired business will offer incremental profits for the enlarged Group as we leverage their portfolio through our stronger global distribution channels.”

Andrew Burke, Chief Executive Officer, added: “Tilgin IPTV is a sound acquisition for Amino, delivering an extended product portfolio with exciting leading-edge features as well as valuable middleware partners and wider customer reach. The market is demanding consolidation coupled with innovation and Amino is ideally placed to deliver this elusive mix as the shape and nature of IPTV continues to evolve.”

More: Tilgin Divests its IPTV Business to Focus on IP Residential Gateways