Motorola to Acquire Tut Systems

Continuing, through acquisition, its drive to provide telcos complete IPTV packages, set-top box kingpin Motorola Inc. announced plans Thursday to merge with video encoding vendor Tut Systems Inc. in a deal valued at $39 million.

Motorola has been building an IPTV ecosystem largely through acquisitions. Just last month it announced plans to buy home networking vendor Netopia Inc. In July, it announced plans to snap up VoD platform vendor Broadbus Inc. Earlier this year it acquired Amedia Networks Inc., a maker of home gateways.

This string of deals, combined with several by Cisco Systems Inc. and Ericsson’s announcement this week of plans to buy Redback Networks, underscore the value of the complete IPTV market opportunity.

Tut Systems, like Netopia, will become a wholly-owned subsidiary of Motorola and will be integrated into the Motorola Connected Home Solutions business

Tut Systems provides digital video encoding, processing and distribution products that enable telcos to deliver IPTV services over an array of network types. Their products support MPEG-2 and MPEG- 4 AVC video compression, local ad insertion, forward error correction and real-time conditioning of video and audio.

The integration of Tut Systems' solutions with Motorola's digital video delivery offerings will expand Motorola's ability to help service providers deploy advanced video services over IP, ATM or RF-based network architectures.

"Motorola's financial resources and customer relationships will enable us to address larger customer opportunities that were challenging as a smaller company," said Sal D'Auria, president and CEO of Tut.

Motorola says it intends to maintain Tut Systems' operations in Lake Oswego, N.Y., Oregon, San Diego and Pleasanton, Calif.

Motorola Inc. www.motorola.com

Tut Systems Inc. www.tutsys.com

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