Pace buys U.S. broadband company 2Wire

LONDON (Reuters) - Pace (PIC.L: Quote, Profile, Research), the world's largest set-top box maker, has agreed to buy U.S. broadband technology firm 2Wire for $475 million (306.6 million pounds) to broaden its customer base beyond cable and satellite into the Internet TV market.
The British company, which overtook Motorola (MOT.N: Quote, Profile, Research) to claim the top spot in May, said 2Wire had an established relationship with tier-one North American telecoms providers including AT&T (T.N: Quote, Profile, Research), and the deal would catapult it to number three in the global telecommunications home-hub market.
Neil Gaydon, chief executive of Pace, said: "We have built a strong position in the U.S. with cable and satellite operators and 2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of U.S. operator requirements."
2Wire is owned by a consortium including Alcatel-Lucent (ALUA.PA: Quote, Profile, Research), AT&T, Telmex TLX.SN and Oak Investment Partners.
Yorkshire-based Pace, which makes set-top boxes for BSkyB (BSY.L: Quote, Profile, Research), Canal+ (CNLP.PA: Quote, Profile, Research), and Comcast (CMCSA.O: Quote, Profile, Research), also on Monday reported a 46 percent rise in first-half pretax profit, and said it was close to achieving its 8 percent operating-margin target.
The company posted pretax profit of 45.4 million pounds on 21 percent higher revenue of 635.2 million pounds in the six months to end-June.
It said given its strong market position and ongoing demand for digital television, it should deliver mid-single digit revenue growth over the medium term.
(Reporting by Paul Sandle; Editing by Sharon Lindores)


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