US telecoms equipment maker Arris Group has agreed to pay $2.1 billion (£1.4 billion) in cash and stock for UK set-top box maker Pace in one of the biggest deals involving a British tech firm for some time.
It brings down the shutters on a name that has a long history on the UK tech scene. Founded in 1982, Pace Micro (as it was then) always specialised in satellite equipment, even buying up the set-top division of the famous Cambridge-based Acorn Computers in the late 1990s.
The real step up for Pace came in 2008 when it bought the large set-top box division of Philips, at which point it also dropped the ‘Micro’ element from its name.
“Adding Pace’s talent, products and diverse customer base will provide Arris with a large scale entry into the satellite segment, broaden our portfolio and expand our global presence. We expect this merger will enable ARRIS to increase its speed of innovation,” said Arris CEO, Bob Stanzione.
In essence, the set-top box market is now consolidating among the larger players just as it has been among more minor ones for some time.
However, it is a turnaround for Pace which has struggled once or twice during its long existence, most recently in 2011 when former Asda CEO and Post Office non-executive chairman Allan Leighton became the firm’s chairman. He seems to have led a major revival of the business.
The combined company now has the size to take on its rivals – 8,500 employees worldwide. Pace is still the larger and more profitable of the two, roughly twice the size of its US suitor.
Pace has always operated in a market based on a degree of boom and bust. This looks like a boom day for the shareholders.