Ericsson Media Solutions announced its rebranding to MediaKind. The announcement was made by way of a webinar and press release.
This is the most recent step in a lengthy process started ahead of the 2017 NAB Show when Ericsson announced the Company would evaluate strategic alternatives for its Media Businesses. The initiative concluded in late January 2018 with Ericsson deciding to keep its Managed Services (and rebrand to Red Bee Media) business and divest the Media Solutions Business to private equity firm One Equity Partners.
The divestiture will take the form of a sale of 51% of the equity interest in the Media Solutions Business, with Ericsson maintaining a 49% ownership position. This structure was described by Ericsson’s President and CEO Börje Ekholm as creating “the best long-term value, for both our customers and our shareholders.”
The contemplated transaction with One Equity Partners has yet to close, though the closing is anticipated during the current quarter. There are still no deal terms in the public domain.
Beyond the disclosure of the new brand, the announcement provided confirmation on the products involved in the divestiture and the future management team for MediaKind. Angel Ruiz will remain the CEO of MediaKind; he had been serving as the CEO of the Media Solutions Business.
In describing the product portfolio, the press release references the precedent businesses acquired to create MediaKind’s compression, middleware, and related solution offerings. Based on public disclosures, in excess of $1.5 billion was spent in the series of acquisitions of Tandberg Television (2007), HYCGroup (2007), Aspex (2012), Microsoft Mediaroom (2013), Fabrix (2014), Azuki Systems (2014), and Envivio (2015). (During MediaKind’s press conference, Mr. Ruiz indicated Ericsson spent $3 billion on the assets of MediaKind).
Lengthy, public sale processes are not beneficial to a supplier’s brand perception. The more clarity on the future business and management team the better. Further, the timing of the announcement allows for the commencement of marketing efforts in advance of the IBC Show in the fall. IBC is explicitly referenced in the press release as the forum where MediaKind will discuss its portfolio in greater depth.
It is worth highlighting the considerable ground the new management team has to cover from a marketing standpoint. Ericsson is a brand with a long history in the media industry. We have tracked Ericsson’s brand metrics in the media sector for almost a decade. Ericsson has strong awareness across all geographies and customers types.
While MediaKind is new, the management team will have a large platform to develop the brand. Even as an independent entity, MediaKind will be one of the largest technology suppliers in the industry. The last full year revenue disclosure by Ericsson was 3 billion SEK or approximately $380 million USD. MediaKind will have over 1600 employees and a large install based of large, high-profile telco, cable, satellite, and broadcast companies.
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