Profits up as Pace buys 2Wire
DIGITAL television technologies firm Pace revealed plans for a £308m acquisition as it announced a 46% rise in pre-tax profits.
The Saltaire-based company is to buy 2Wire, the leading US provider of residential gateways, software and services to broadband service providers in a deal Pace believes will expand its customer base across the Atlantic and provide opportunities in the telecommunications market.
In the first six months of the year Pace saw revenues and margins improve to take pre-tax profits to £45.4m, up from £31m in the same period last year.
The company credited its performance to strong demand in global pay-TV markets and new platforms for existing customers.
Neil Gaydon, Pace chief executive, said: “In the first half, Pace delivered excellent revenue and profit growth and increased its cash position to further strengthen the balance sheet. These results were produced despite some challenges within the supply chain, due to the skill of our operations teams, scale and strong supplier relationships.
“Pace has become the world’s leading supplier of digital set-top boxes, an achievement built on our deep understanding of the payTV operators’ business and market requirements and our ability to be first to deliver the technology that enables them to bring new services to market.
“With today’s announcement of our proposed acquisition of 2Wire, we expect to widen out our US customer base and opportunity as well as develop Pace’s technology capability.”
2Wire boasts customers including US telecoms giant AT&T and includes a balance sheet with cash holdings of around £36m. Pace intends to fund the purchase from cash reserves and new borrowing.
Pasquale Romano, chief executive of 2Wire, said: “Pace is an excellent strategic fit for the 2Wire business and will enable us to take our products and services to the next level of their development.
“The combined customer base, engineering capability and product breadth of Pace and 2Wire make this a compelling transaction for our customers, our employees and our end users globally.”
