Saltaire, U.K. - Pace Micro Technology, a maker of digital TV set-top boxes and other electronics, announced on Wednesday that it will acquire the set-top and connectivity solutions business of Royal Philips Electronics (NYSE: PHG), in a transaction valued at around $136 million.

Under the terms of the reverse takeover transaction, Pace will issue cash and shares to Philips, which will hold an approximate 22.5% stake in Pace when the transaction closes.

Pace will also be able to utilize the Philips brand in retail distribution on a range of products for three years.

The France-based Philips business employs 335 and produces digital TV products including satellite, cable, terrestrial and IPTV set-top boxes.

"Based on 2006 performance, this deal will create a company with pro forma revenues of over $1.0 billion, producing approximately 8.5 million set-top boxes a year," said Pace CEO Neil Gaydon.

"There is a strong strategic fit from customer, product, geographic, culture and scale perspectives. We have minimal customer overlap and the combined group will have a significantly enhanced technological position."

Related Links:
http://www.pacemicro.com./corporate/newsroom/pacenewsitem.asp?id=10626