SeaChange International Acquires Poland-Based DCC Labs to Enhance Set-Top and Multiscreen Device Software Development Capabilities
Restructures In Home Business to Immediately Reduce Costs Expected to Achieve $8 Million in Annualized Savings
ACTON, Mass., May 12, 2016 (GLOBE NEWSWIRE) -- Multiscreen innovator SeaChange International, Inc. (NASDAQ:SEAC) today announced its acquisition of DCC Labs, a Warsaw, Poland-based set-top and multiscreen device software developer and integrator, to advance SeaChange’s set-top, multiscreen subscriber device and application strategies. The transaction closed on May 6, 2016 and SeaChange paid approximately $8 million in cash and SeaChange stock for DCC Labs. DCC Labs is expected to contribute an additional several million dollars of revenue annually to SeaChange. The transaction is expected to be accretive in fiscal 2017, as well as provide an anticipated one-year payback through synergies and cost savings that SeaChange will begin to realize immediately. The transaction includes a lock-up provision for the SeaChange stock that unwinds over a three-year period.
DCC Labs was owned in part by 7bulls.com Sp. z o.o., a private group of software development and integration companies focused on delivering advanced technologies and IT solutions for large enterprises throughout the Americas, Asia and Europe in a range of industries including finance, automotive, retail and media.
DCC Labs, with over 70 engineers, has commercially deployed projects supporting millions of set-tops, mobile devices and smart TVs, representing development expertise that spans the television service provider industry’s Reference Design Kit (RDK), as well as Android and Linux operating systems.
In 2015, SeaChange engaged DCC Labs to support a major set-top development project for a large European cable operator, resulting in deployment of a user interface and an RDK 2.1-based home video gateway for field trial tests within four months of engagement. Subsequently, SeaChange engaged DCC Labs to assist with improving quality and providing enhancements for another European cable operator’s deployed home video gateway.
“Through our successful collaboration in the field, SeaChange determined that DCC Labs’ experience and strengths are exceptionally well-aligned with our strategy to operate more efficiently and rapidly roll out high-value, front-end product innovations,” said Ed Terino, CEO, SeaChange. “SeaChange is now better positioned to serve the global RDK licensee community, as well as fulfilling service providers’ growing desire to focus on a select set of vendors to support their video infrastructure from the back-end all the way through to set-tops, mobile devices and the subscriber experience.”
The acquisition of DCC Labs enables SeaChange to optimize the operations of its In Home business, developer of deployed software solutions including the SeaChange Nucleus home video gateway. In conjunction with the acquisition of DCC Labs, SeaChange commenced a workforce reduction within its In Home engineering and services organization, which is anticipated to achieve $8 million in annualized cost savings. DCC Labs CEO Marek Kielczewski, who has led that company through a period of growth since 2009, has transitioned to the role of Senior Vice President of Consumer Premises Equipment (CPE) Software and will lead SeaChange In Home.
Marek Kielczewski commented, “Through its end-to-end offering and platform-agnostic approach, SeaChange has uniquely rolled up capabilities to empower service providers to go to market faster with new services and enhancements, and to reduce their total cost of ownership of advanced set-top and multiscreen clients.”
“7bulls.com Group's strategy includes entering into strategic alliances with carefully selected partners and investors. Nevertheless, the firm and unwavering interest shown by SeaChange in one of our companies has brought us unexpected and great satisfaction,” said Konrad Wawruch, CEO, 7bulls.com. “SeaChange, being a global player, offers the DCC Labs team greater capacity for development and a significant increase in the scale of their presence in the global market, something that team fully deserves.”
In addition to enhancing SeaChange’s capabilities for software development and integration through project management to testing, the DCC Labs acquisition brings market-ready products, including an optimized television software stack for Europe’s DVB (Digital Video Broadcasting) community and an HTML5 framework for building future-proof user interfaces for CPE devices.
SeaChange will feature its open software solutions for content management, delivery, monetization and subscriber experience at industry conferences including INTX 2016 (May 16-18, Boston), ANGAcom (June 7-9, Cologne), OTT Exec Summit (June 15, New York City) and NCTC Independent Show (July 24-27, Orlando). Visit http://www.schange.com/company/events to book a demonstration.
About SeaChange International
Enabling our customers to deliver billions of premium video streams across a matrix of pay-TV and OTT platforms, SeaChange (Nasdaq:SEAC) empowers service providers, broadcasters, content owners and brand advertisers to entertain audiences, engage consumers and expand business opportunities. As a three-time Emmy award-winning organization with 23 years of experience, we give media businesses the content management, delivery, measurement and analytics capabilities they need to craft an individualized branded experience for every viewer that sets the pace for quality and value worldwide. Visit www.schange.com.
About 7bulls.com Group
Since 1993, 7bulls.com Group has been providing services involving the implementation and integration of information systems as well as the creation of complex IT solutions, equipping international corporations from North America, South America, Asia, Western and Central Europe with modern advanced technology. The companies from the 7bulls.com Group have specialized in providing solutions for firms from the financial, publishing and automotive industries as well as for the media and sales networks. 7bulls.com group has formed strategic partnerships with many large and established players such as MIRAKL, SAP Hybris, Clear2Pay (FIS Group) and the Qualiac Group. The offices in Warsaw, Torun and Paris are currently staffed by over 150 people. Visit www.7bulls.com.
Safe Harbor Provision
Any statements contained in this press release that do not describe historical facts, including regarding anticipated revenue, cost savings and other financial matters, are neither promises nor guarantees and may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements contained herein are based on current assumptions and expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. Factors that could cause actual future results to differ materially from current expectations include the following: the continued spending by the Company’s customers on video systems and services and expenses we may incur in fulfilling customer arrangements; the continued development of the multiscreen video and OTT market; the inability to meet revenue targets for our SaaS-based multiscreen service offering; the Company’s ability to successfully introduce new products or enhancements to existing products and the rate of decline in revenue attributable to our legacy products; the Company’s transition to being a company that primarily provides software solutions; worldwide economic cycles; measures taken to address the variability in the market for our products and services; the loss of or reduction in demand by one of the Company’s large customers; consolidation in the television service providers industry; the cancellation or deferral of purchases of the Company’s products; the length of the Company’s sales cycles; the timing of revenue recognition of new products due to customer integration and acceptance requirements; any decline in demand or average selling prices for our products and services; failure to manage product transitions; failure to achieve our financial forecasts due to inaccurate sales forecasts or other factors, including due to expenses we may incur in fulfilling customer arrangements; the Company’s ability to generate sufficient revenues to reduce its losses or regain profitability; the Company’s ability to manage its growth; the risks associated with international operations; the ability of the Company and its intermediaries to comply with the Foreign Corrupt Practices Act; foreign currency fluctuation; the Company’s ability to protect its intellectual property rights and the expenses that may be incurred by the Company to protect its intellectual property rights; an unfavorable result of current or future litigation; content providers limiting the scope of content licensed for use in the video-on-demand and OTT market or other limitations in materials we use to provide our products and services; the Company’s ability to obtain necessary licenses or distribution rights for third-party technology; the Company’s ability to compete in its marketplace; the Company’s ability to respond to changing technologies; the impact of acquisitions, divestitures or investments made by the Company; the Company’s ability to access sufficient funding to finance desired growth and operations; the impact of changes in the market on the value of our investments; any impairment of the Company’s assets; changes in the regulatory environment; the Company’s ability to hire and retain highly skilled employees; the ability of the Company to manage and oversee the outsourcing of engineering work; additional tax liabilities to which the Company may be subject; the security measures of the Company are breached and customer data or our data is obtained unlawfully; service interruptions or delays from our third-party data center hosting facilities; the implementation of restructuring programs; disruptions to the Company’s information technology systems; uncertainties of regulation of Internet and data tracking over the Internet; if securities analysts do not publish favorable research or reports about our business; our use of non-GAAP reporting; the effectiveness of the Company’s disclosure controls and procedures and internal controls over financial reporting; the Company’s use of estimates in accounting for the Company’s contracts; the performance of the Company’s third-party vendors; the Company’s entry into fixed price contracts and the related risk of cost overruns; the risks associated with purchasing material components from sole suppliers and using a limited number of third-party manufacturers; compliance with conflict minerals regulations; terrorist acts, conflicts, wars and geopolitical uncertainties; the Company’s Delaware anti-takeover provisions; and the effect on revenue and reported results of a change in financial accounting standards.
Further information on factors that could cause actual results to differ from those anticipated is detailed in various publicly available documents made by the Company from time to time with the Securities and Exchange Commission, including but not limited to, those appearing under the caption “Certain Risk Factors” in the Company’s Annual Report on Form 10-K filed on April 13, 2016. Any forward-looking statements should be considered in light of those factors. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak as of the date they are made. The Company disclaims any obligation to publicly update or revise any such statements to reflect any change in Company expectations or events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results may differ from those set forth in the forward-looking statements.
Contact: Press Jim Sheehan SeaChange +1-978-897-0100 x3064 jim.sheehan@schange.com Investors Monica Gould The Blueshirt Group +1-212-871-3927 monica@blueshirtgroup.com
Released May 12, 2016