US computer networking colossus Cisco has inked a deal to buy Hong Kong-based DVN Holdings Limited, bolstering its place in the China market and adding to a growing list of acquisitions.
The value of the deal is estimated at 44.5 million US dollars, with Cisco paying 17.5 million dollars up front and the rest of the purchase price to be doled out during the coming four years based on targeted sales goals.
The acquisition is expected to close in the first half of next year, pending approval by regulators and DVN shareholders, according to details released Monday by Cisco.
Cisco and DVN combining resources "will ensure that Chinese consumers continue to receive superior digital services today and are provided with world-class advanced technologies moving forward," said DVN chief executive Terry Lui.
"Cisco has demonstrated a strong commitment to the Chinese market, and I look forward to working with them as part of our ongoing alliance," he added.
Liu will continue to run DVN, a leading maker of boxes for delivering digital broadcasts and interactive online services to television sets in China.
"Cisco and DVN have similar cultures that emphasize video innovation and a shared vision to enable multi-media connected homes across China," said Ken Klaer, general manager of Cisco's International Cable Business Unit.
"With this acquisition... Cisco will be well positioned to engage in the largest digital transformation opportunity in the world today."
The Chinese cable market is reportedly the largest in the world with 160 million subscribers and is predicted to grow to as many as 200 million over the next three to five years.
Approximately one-third of the China market has converted to digital cable and the Chinese government has mandated full digitization by 2015, according to Cisco.
DVN is the latest in a series of acquisitions by San Jose, California-based Cisco.
Last week, Cisco announced it had agreed to buy Web security company ScanSafe for some 183 million dollars. Privately held ScanSafe is based in London and San Francisco.
Earlier in October, Cisco bid three billion dollars for Norwegian video conference company Tandberg and agreed to buy wireless equipment maker Starent Networks for 2.9 billion dollars.
In March, Cisco bought Pure Digital Technologies, maker of the hot-selling Flip Video camcorder, and it purchased Tidal Software Inc. the following month.
