NETGEAR, a worldwide provider of technologically advanced, branded networking products, has announced the execution of a definitive agreement to acquire SkipJam Corp., a leader in integrated software for home entertainment and control. NETGEAR’s acquisition is expected to enhance its strategically important digital home entertainment and control business by significantly strengthening NETGEAR’s software ability to expand its multimedia product portfolio.
Under the terms of the agreement, NETGEAR will pay up to US$ 9 million in cash for SkipJam, a portion of which is structured as a retention incentive program for the acquired engineering team. The acquisition is subject to various standard closing conditions and is expected to close in the third quarter of 2006.
Ahmad Zeidan, Channel Sales Manager, NETGEAR Middle East, said, “The Internet has evolved to become not only one of the most widely used means for communication and data transfer, it has also become the primary channel for the delivery of voice and entertainment. Even in Middle East, the number of Internet users has been steadily rising with more and more entertainment content being digitally distributed over the web, resulting in a growing market for networked entertainment devices. Research shows that in the last five years, there has been a 500 per cent increase in the number of Internet users in the Middle East and 90 per cent in the UAE. The coming together of NETGEAR’s superior technology for wireless communication and SkipJam’s dynamic multimedia technology will enable consumers to fully enjoy the convergence between home entertainment and IT products.”
“With the availability of high-speed, extended range home network infrastructure solutions such as NETGEAR’s RangeMax™ Next draft 802.11n wireless and 200 Mbps High Definition (HD) Powerline, streaming multiple HD quality videos simultaneously across the network is now a reality. SkipJam has the unique software technology to become the platform for us to build out our multimedia product portfolio and continue expanding worldwide in the growing category of digital home entertainment and control,” he added.
According to Parks Associates, a leading international market research and consulting firm that focuses on all product and service segments that are ‘digital’ or provide connectivity within the home, over 30 per cent of network nodes will be multimedia/entertainment focused as early as 2010, up from 4 per cent today. Parks estimates this represents an opportunity of over 200 million multimedia/entertainment/multimedia nodes to be connected.
This acquisition fits NETGEAR’s strategy of expanding its product portfolio, and strengthening its global brand presence. It also accelerates NETGEAR’s participation in the expanding market for digital home entertainment and control. SkipJam’s technology will form the basis of future NETGEAR multimedia products, including media centers, media players, and audio players, building upon NETGEAR’s first generation of digital home entertainment products.
The addition of SkipJam’s seasoned team of engineering professionals grows a dedicated, world-class group focused on hardware, software, and technology for digital entertainment and control.
NETGEAR’s plans to acquire SkipJam, follows the successful integration of products for channel bonding between NETGEAR and BigBand Networks, a leading provider of broadband multimedia infrastructure for video, voice and data. This integration was designed to combine multiple downstream cable modem channels for higher broadband access speeds.
NETGEAR recently made its entry into the Middle East and appointed Ashley LLC as the official distributor for its networking products and solutions in the UAE and the Middle East. As an authorized distributor, Ashley will stock the full range of NETGEAR products, particularly its wireless series for the retail, end-consumer and SOHO segment and expects to achieve high turnover in annual sales of the company’s solutions and services.
About NETGEAR:
NETGEAR® (Nasdaq: NTGR) designs technologically advanced, branded networking products that address the specific needs of small and medium business and home users. The Company's product offerings enable users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. For more information, visit the company's Web site at www.netgear.com
