Technicolor to Acquire Cisco Connected Devices Division for €550M in Cash, Stock

Technicolor

has entered into an exclusive agreement with Cisco

to acquire its customer premises equipment (CPE) business for €550 million1 (or $600 million equivalent) in a cash and stock transaction, reviewed by the Boards of Directors of the two companies, which will be on a cash free, debt free basis. The acquisition should result in Technicolor's Connected Home segment reaching adjusted EBITDA in excess of €200 million by year end 2016 and best-in-class profitability (i.e.8-9% adjusted EBITDA margin) by 2017. The transaction will also translate into double-digit EPS accretion at Group level starting in the first full year after closing. Under the terms of the agreement, upon the closing of the transaction, Cisco will receive approximately €413 million ($450 million) in cash and approximately €137 million ($150 million) in newly issued Technicolor shares, subject to certain adjustments provided for in the agreement. The transaction and addition of Cisco's complementary product portfolio will make Technicolor one of the global leaders in CPE and will immediately increase the company's industrial and technological scale in all