Cisco acquires set-top box business of DVN Holdings for $44.5 million

The Silicon Valley networking giant Cisco, continuing with its rapid niche acquisitions, today dislosed plans to acquire the set-top box business of Hong Kong-based DVN Holdings Limited for $44.5 million, to strengthen its operations in China.

The world's largest maker of networking and communication equipment, Cisco will pay $17.5 million up front with an additional maximum amount of $27 million over four years based on the achievement of specific sales milestones.

Cisco's proposed new acquisition, its seventh this year, is expected to close in the first half of calendar year 2010 subject to standard closing conditions, DVN shareholder approval and regulatory approvals.

Hong Kong listed, DVN Holdings has major operations in China and is a market and technology leader in digital cable solutions in the Chinese market, and boasts investors like Motorola, which holds a 15.4-per cent stake in set-top box maker.

The Chinese cable market is currently the largest in the world with 160 million subscribers and is predicted to grow to as many as 200 million over the next three to five years.

Currently, only about one-third of the market has converted to digital cable. With the Chinese government mandating full digitisation by 2015, Cisco plans to be a long-term player in China.