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, Sky plc, Comcast, DIRECTV, Telefónica, Time Warner Cable, and Virgin Media. North America accounts for more than half of the UK company's sales. Pace plc was founded in 1982.
UK-based Pace's largest market is North America, home to 55% if its $2.4 billion in annual sales. Europe is next with about $400 million in sales, followed by Latin America ($374 million). The company has operations in the US, France, India, and China.
Pace plc reported $2.4 billion in 2012 sales, a 4% increase versus 2011, driven by strong demand for the company's next-generation Media Server in the second half of the year. All the gains came in North America, where sales jumped 24%. Continued economic malaise in Europe resulted in a 12% decline in annual sales there. Previously fast-growing Latin America posted a 20% decline. Sales of the company's residential gateways grew 8%, as did sales of software and services. Set-top boxes and media servers (up 3%) posted more modest sales growth. Net income increased 50% to $58.4 million in 2012. Pace attributed the increase in profitability to sales growth and improved operating efficiencies.
Pace is intent on building on its position as a leader in advanced technologies for PayTV hardware. To this end, in August 2013 the company's Pace XG1 Multi-tuner Video Gateway, developed in partnership with TiVo Inc., was deployed by North America cable operator General Communication Inc. The Pace XG1 with TiVo's Advanced User Interface platform offers cable customers linear TV, VOD, and interactive content across multiple screens and devices. In March 2013 Pace began deliveries of its Media Gateway and client device platform to support new converged home services for Get (Norway's leading digital television and broadband provider) subscribers.
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.
Mergers and Acquisitions
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.