Digital software provider Espial Group Inc. (TSX:ESP) is expanding its reach with the acquisition of an embedded software company in the United Kingdom, the firm announced Friday.
© Supplied photo
Espial chief financial officer Carl Smith.
Espial will acquire ANT plc, a publicly traded company with about 40 employees and customers including major TV manufacturers, set-top box vendors, broadcasters and service providers.
The U.K. team will remain in Cambridge, a university town that Espial chief financial officer Carl Smith said he feels is similar to Ottawa.
A large number of Espial’s customers are in Europe, and the company has sales representatives there but no engineers. ANT’s strong engineering staff will help the company in the future, Mr. Smith said, with opportunities to recruit additional talent from the University of Cambridge.
“We’ll have a very deep talent pool to draw from in the future,” he said in an interview with OBJ.
Espial’s Ottawa office has been growing rapidly – from 50 employees up to 90 in under a year.
“We’re building a company here in Ottawa that we’re very excited about,” Mr. Smith said. “Now, this (acquisition) gives us an opportunity to grow even faster.”
He said the purchase will increase Espial’s customer base, revenues and scale. It will allow the company to expand its customer footprint in Europe, North America and Asia, and add additional intellectual property including client and user experience products, technologies and patents.
“We believe the acquisition of ANT will extend our capabilities to establish Espial as a clear market leader as TV service providers aggressively move to IP video delivery,” stated Espial president and CEO Jaison Dolvane in a company release.
The value of the acquisition was not disclosed, but a press release said the offer values the ordinary share capital of ANT at approximately £5 million, or almost $8 million in Canadian dollars. Espial has offered to acquire all outstanding shares of ANT in exchange for cash consideration of £0.205 per outstanding share.
The acquisition is expected to close in the first quarter of 2013, pending shareholders, court, regulatory and other approvals. ANT’s board of directors has announced its support of the acquisition and has recommended that shareholders accept the offer.
"The TV market has continuously evolved to bring an ever richer set of video services to consumers over managed networks and the open Internet to a wide range of consumer devices," stated ANT chairman Royston Hoggarth. “We believe the combination of these two market leaders will benefit and help intercept the growth of this market."
Currently, ANT’s shares are listed on AIM, a London Stock Exchange regulated market. Its software has been used by companies including Cisco, France Telecom and Samsung.
Mr. Smith said he is pleased with the direction Espial is headed in.
“I think it’s always great to see an Ottawa company grow,” he said. “We lose too many headquarters here, and it’s nice to see ours growing.”
The Ottawa firm underwent a review of strategic alternatives in 2011, but decided not to proceed with a sale.
In its most recent quarterly results, Espial reported an 18 per cent decrease in revenues year-over-year as some customers slowed their purchases.