Pace wants to be on top of your connected world. The company develops set-top boxes that deliver various content and services for the pay TV and telecommunications markets. Its standard and high-definition tuners and personal video recorders (PVRs) work with digital cable, satellite, and Internet protocol-based television systems. It also offers gateway devices and software, as well as "smartboxes" that connect multiple set-top boxes. Marketing its products worldwide, Pace's more than 160 customers include such providers as AT&T, BSkyB, Comcast, DIRECTV, Telefónica, Time Warner Cable, and Virgin Media. North America accounts for more than 40% of sales, and 95% of Pace's sales are generated outside the UK.
The company's organic revenue growth in 2010 came in at 10%, as it turned in an overall top line improvement of 17%. North America contributed with nearly 30% growth, while Latin America essentially doubled its revenues. Europe declined 3% against the previous year, but the real struggle came in the UK, which saw its business dry up by more than half. Interest payable of £2.6 million, compared to £100,000 the year prior, crept in to make its net income dip 3%, but operating profit was up nearly 5%.
A trio of acquisitions in 2010 kicked in the extra percentage points of growth and allowed the company to expand its product offerings and geographic markets. Paris-based Bewan Systems, which Pace bought for about €12.5 million ($17 million), specialized in residential equipment for cable systems, enabling Pace to offer bundled gateway and digital TV services to pay TV subscribers in Europe, North Africa, and the Middle East. US-based 2Wire, which cost about $475 million, broadened the company's offerings in the US to include telecom clients, and furthered its push into home entertainment offerings. Finally, Belfast, UK-based pay-TV software specialists Latens Systems, which Pace also bought that year for nearly £30 million (about $46 million), expanded the company's software and technology capabilities, most notably around content access security, downloadable security, user interface deployments, and back-end and head-end expertise.
Although there are opportunities in emerging markets that are still in the process of deploying digital and high-definition services, Pace sees its future in convergence as mature markets are offering opportunities beyond just delivering TV programming content. Pace is developing its products to deliver services ranging from telemedicine to home security, Internet applications, and streaming video games. The company is gearing its technology toward incorporating mobile devices into the converged home set-up it offers.
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