Digital content delivery services and home access devices company Technicolor has received a binding offer from French investment fund Fonds de Consolidation et de Developpement des Entreprises (FCDE) for the acquisition of its head-end business, operating under the Thomson Video Networks brand. The ofer values the business for a non-material amount and the group will register a non-cash loss for this disposal in its 2010 financial statements. The FCDE will enter a trademark agreement with Technicolor to use the Thomson t brand. The head-end activity provides a portfolio of video compression and content processing solutions, including video encoders/decoders, MPEG processors, video servers, deatacasters, network management, monitoring and switching product lines. With 525 employees operating in 15 countries, it recorded revenues of about 61 million euros in 2009. Before restructuring, the head-end activity accounted for 16 percent of the total Grass Valley perimeter revenues and 20 percent of its operating loss. In 2009, Grass Valley was reorganised around three distinct activities: broadcast, transmission and head end. The broadcast business was sold to Francisco Partners on 31 December 2010 and the transmission business’s sale to Germany's Partner Capital group was announced on 23 December 2010. Technicolor expects to close the sale of its head end business in the first half, subject to regulatory approvals and consultations.
Technicolor also announced that it will not sell its premier retail network (PRN) business having received unsatisfactory offers from potential buyers. Based on PRN’s achievements in 2010 and the improvement of the advertising market the group will develop the PRN business instead. It will be consolidated as part of its entertainment services segment and is expected to contribute positively to EBITDA and cash flow generation this year. The disposal of the head-end business and reintegration of PRN marks the end of Technicolor’s disposal programme, launched in early 2009.
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