Cisco Moving On Set-Top Boxes

nevermindme writes "Cisco has agreed to plunk down a whopping $6.9bn for Scientific-Atlanta, hoping to take a major share of the set-top-box market and push video efforts. The networking giant will pay $43 per share in cash for Scientific-Atlanta ($5.3bn) and swallow $1.6bn in debt. With the buy, Cisco acquires one of the more dominant set-top-box makers. In addition, it pushes well beyond the data center to touch consumers where they live."

Comments

Cisco's been in the home for a while...

[carlcub]

Ever hear of Linksys? Cisco bought them a while back. Lots of people have their stuff. Probably not as many as have cable, but it's still a substantial number of households.

No, you get a clue

[brunes69]

Scientific Atalnta is in1.6B in debit. Thus, when Cisco "swallows" them up, they are also "swallowing" 1.6B in debit.

It has absolutely nothing to do with the purchase price of $43 per share, or 5.3B, other than the fact that the transaction will essentially be a 6.9B red mark on Cisco's balence sheet (minus SA's revenues).

Re:Oh

[SuiteSisterMary]

Exactly; they want in on what's going to be a big market. And this way, the cable/DSS companies buy Cisco routers to talk to Cisco cable access multiplexors or DSLAMS to talk to Cisco cable modems/DSL modems, (plugged into Cisco home gateway appliances, thanks to Linksys) and Cisco set-top boxes, hooked up to your Cisco VoIP phone. And so on.

Convergence

[dana340]

I agree with the fact that Cisco is looking toward the conversion of data systems. Right now companies are offering cable TV, internet, and phone all through coax. In about 10 years from now, I predict that television entertainment will still exist, but it will evolve into something that cable carriers will stream into homes using their network connection to your home via coaxial connections, or via fiber. It makes perfect sense for Cisco to go into this market. it secures another market for them in the future, they can offer some of the equipment to make such the switch. And besides, who goes out to the store to buy a cable box? They're often provided by the cable companies themselves to be compatible (and expandable) with their existing infrastructure.

Article wrong.. $1.6b cash not debt

[tpengster]

I believe the article is wrong.. SFA has $1.6b in cash, not debt. CSCO will be paying $6.9b, but the effective price will be $5.3b since they will be acquiring the cash on SFA's balance sheet.

http://finance.yahoo.com/q/ks?s=SFA

It already exists

[Gobelet]

Sagem is already making something like this in France, with an ISP called FREE.

You get 20 mbps, digital cable, Internet, phone, router functionality, Wi-Fi coverage, along with Ethernet and USB ports... VoD is almost here. The box is called a Freebox.
They added a few months ago something cool: you can stream media from your computer to the set-top box, which is plugged into a TV.

And you get all this digital goodness for something like $35 a month (30).

Register is wrong, it is CASH not DEBT

[omgwtfroflbbqwasd]

As previously posted, they are paying $5.3B net since the other $1.7B cash is for $1.7B cash. S-A has no significant debt, and definitely not $1.7B worth. Refer to these (correct) articles:

As quoted here:

Scientific-Atlanta also comes with a bushel of excess cash. The money in its bank vault will go to Cisco, shaving the ultimate price tag for Scientific-Atlanta from $6.9 billion to $5.3 billion.

Or here.

Cisco said that the net cost of the acquisition would be $5.3 billion after subtracting Scientific-Atlanta's existing cash balance. It also plans to assume outstanding Scientific-Atlanta options.