SeaChange is selling On Demand Group (ODG) to US-based digital video service provider Avail-TVN for US$27 million (€21 million) on a cash-free, debt-free basis.
The UK-based video-on-demand aggregator will become part of Avail-TVN with immediate effect. SeaChange said the move was in line with a strategic shift be focus purely on its software products.
“This sale is part of the ongoing execution of our strategy to transform SeaChange into a pure-play software company, while generating significant cash for our business and improving shareholder value. As the sale is to a strategic buyer, the combination of Avail-TVN and On Demand Group creates a global media services powerhouse, which also presents a significant customer opportunity for SeaChange,” said SeaChange CEO Raghu Rau.
The acquisition by Avail-TVN was financed by the injection of US$100 million of new financing by private-equity investor Carlyle Group in the company, with equity provided by a Carlyle US growth fund and a European technology partners fund. The deal means that Carlyle has become Avail-TVN’s largest single investor.
The company said it would use the new capital to invest in overseas expansion, of which the ODG acquisition was a part. It said that the acquisition expanded its reach to over 25 countries and 70 million households worldwide.
“Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide,” said Ramu Potarazu, Avail-TVN’s CEO. “The Carlyle Group’s investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally. With the integration of On Demand Group, we broaden our capabilities, extend our distribution and are able to further develop monetisation opportunities for our customers in the rapidly-changing digital media space.”
Tony Kelly, CEO of ODG, will report to Potarazu and serve on the group’s executive management team.
