Communications technology giant Ericsson is to acquire the UK headquartered digital media services company Red Bee Media. The latter company, a spin-out from the BBC’s Broadcast division, employs 1,500 people in both the UK and Australia. Ericsson is now planning to add new operations in both Europe and Australia.
While Ericsson has not revealed the financial details of the acquisition, it has indicated that the 1,500 broadcast services professionals who already work at Red Bee Media will come under its wing.
Ericsson is hoping that the buy-out will enhance its broadcast services portfolio and help the company further expand its capabilities in the TV industry.
Red Bee Media is headquartered in the UK from an entity controlled by the Australian-based Macquarie Advanced Investment Partners, L.P.
Ericsson said that the acquisition would allow it to take advantage of its technology and services leadership to help broadcasters and content owners address the convergence of video and mobility.
The acquisition of Red Bee Media will bring 1,500 highly-skilled employees, as well as media services and operations facilities in the UK, France, Germany, Spain and Australia. In the UK, the company employs around 1,240 people. Ericsson said that when these people are added to the company mix its workforce would grow to around 4,000 employees.
And with more than one-third working in the media services business, the UK will become a global media hub for Ericsson, the company said.
Ericsson anticipates that the acquisition will augment its broadcast services business, which started in 2007. This business segment expanded in 2012 with Ericsson’s acquisition of Technicolor’s Broadcast Services division.
Red Bee Media was set up in 2005. The company has grown its service portfolio and now has a growing number of global customers – ranging from major broadcasters to broadband platforms.
It provides a range of media services, including media asset management, playout and digital video publishing, metadata services, multilingual access services and creative services.
Here in Europe, Red Bee Media delivers more than 100,000 hours of subtitling per year for leading broadcasters.
With the TV and media industry in a state of transition, especially in the way people consume entertainment, Eircom is eager to get in on the digital content rush.
"Ericsson is making a step change to our business, cementing our commitment to TV and broadcast services and continuing a journey we started in 2007," says Magnus Mandersson, executive vice-president and head of the Business Unit for Global Services, Ericsson.
"We can create value for broadcasters by making digital content more accessible, enabling monetisation of TV content more efficiently," he said.
An Ericsson Mobility Report published in June, for instance, points to how video is the single biggest contributor to traffic in mobile networks, with this trend anticipated to grow 60pc annually until the end of 2018.
"Video traffic shows very strong uptake in the mobile networks and Ericsson can address the need of both broadcasters and telecom operators through our technology expertise and services capabilities," Mandersson said today.
The closing of the acquisition is subject to approval from relevant regulatory authorities and other contractual conditions.
After the deal is done, Red Bee Media will be incorporated into Ericsson’s Business Unit Global Services.