C-Cor to acquire Philips Broadband Networks

In a move intended to triple its international business, cable transmission equipment vendor C-Cor.net is buying Royal Philips Electronics’ standalone transmission business unit, Philips Broadband Networks, for 80 million euros, or close to $80 million in today’s currency markets.

The deal merges two of the cable industry’s pioneering equipment vendors--Philips’s heritage being traced back to Magnavox--and is expected to add about $100 million in annual business to C-Cor’s coffers beginning next year.

“It shows our commitment to the cable industry and to our cable customers,” said David Woodle, C-Cor.net’s chairman-CEO. “Long term, this is going to give us an excellent customer map, an excellent set of history to build upon [and] a set of capabilities to leverage moving forward.”

The deal brings 500 overall employees and a Manlius, N.Y.-based manufacturing facility to C-Cor.net, which recently laid of 260 workers, including 200--or about 75% of the Tijuana, Mexico manufacturing facility, 20 each in C-Cor.net’s facilities in State College, Pa., and Meridian, Conn., and another 20 in three California facilities. The company blamed the roiling financial situation at bankrupt Adelphia Communications, and the possibility it might have to write off all or part of $42 million owed by Adelphia, for the layoffs, a salary freeze and elimination of bonus and incentive sharing for all employees until the beginning of next year.

Still, Woodle said, acquiring Philips fits with his growth philosophy.

“It’s always easy to grow in a growth market and to take advantage of that,” he said. “The challenge and the responsibility of management is to figure out a way to grow and be profitable when there is a down market.”

The deal could close as soon as three months from now, but Woodle cautiously estimated finishing up by year’s end. During that time, he said, further business consolidation will take place as C-Cor.net folds in the Philips product lines.