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Thomson goes B2B

Buys into pro-equipment manufacturer Philips Broadcast 12/10/2000 07:00:00 PM Eastern

Thomson Multimedia, parent company of Thomson Consumer Electronics and European broadcast supplier Thomson Broadcast Systems, is sharpening its focus on the professional video market by acquiring part of camera and switcher manufacturer Philips Broadcast.

Thomson and Royal Philips Electronics, the parent company of Philips Broadcast, have preliminarily agreed to set up a holding company that will comprise Philips' camera, routing, switching, telecine and systems-integration businesses, with Thomson immediately acquiring 67% of the new company and Philips holding on to 33%. Philips will keep two divisions of Philips Broadcast: Digital Networks, which makes DVB-compliant compression products for the satellite market, and MP4NET, which includes the Media Pool video server line.

The five businesses Thomson is acquiring had roughly $220 million in revenue in 1999 and 1,050 employees. Thomson will have the option of acquiring the rest of Philips' 33% stake in the holding company over the next two years. Terms of the initial transaction, expected to be completed in first quarter 2001, were not disclosed.

Thomson says the Philips deal will strengthen Digital Media Solutions, a business unit it formed in August to sell professional equipment to broadcasters and cable networks. The company has also created a joint venture with Alcatel called Nextream to target the interactive-television market.

"Thomson is making an aggressive move in the business-to-business area to complement their consumer products," says Jeff Rosica, vice president and general manager of North American sales for Philips Broadcast and its top-ranking U.S. executive.

Rosica indicated that Philips Broadcast's current senior management would continue with the new holding company. He added that there has not been any discussion of integrating Philips Broadcast with Thomson Broadcast Systems, which makes a full line of transmission and production gear and caters mostly to the European market.

Philips Broadcast counts Fox, ABC and Turner Studios as major U.S. customers for its camera and routing products. The company has 275 employees in the U.S., with a sales organization headquartered in Burbank, Calif., and a major manufacturing facility in Salt Lake City. Additional sales offices are located in Rosemont, Ill., and Ramsey, N.J.

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