Liberate buys Sigma Systems for $62 million

Interactive digital video vendor Liberate Technologies, looking to extend its digital network infrastructure base, is shelling out $62 million for Sigma Systems, a maker of software management for voice and high-speed data services.

The combined company will be able to “integrate this complete solution together to enable the cable companies to define, create, launch and manage digital services, video services, voice services and data services all the way to the consumer,” said Mitchell Kertzman, Liberate’s chairman and CEO.

Liberate’s strength is in mixing IP-based services onto a digital platform. Sigma’s software is used to integrate multiple services used in service creation, delivery and management, especially in the voice-over-IP and high-speed data space.

As a small private company headquartered in Canada, Sigma was becoming hamstrung in dealing with a customer base that was expanding through consolidation and looking for stronger independent software vendors, said Steve Nicolle, Sigma’s president and CEO.

“Our weakest area and an area we knew we had to develop was in digital video and clearly Liberate brings tremendous strength in that area, way more than we probably ever could have anticipated,” Nicolle said.

The combined company will start out with a diverse international customer base – with Sigma’s strengths in North America and Liberate more dominant in Europe and Asia. There will be approximately 700 employees, including a base of Canadian workers that complements Liberate’s Toronto-based engineering facility.

“We’ve been working on this a long time, the whole issue of what our joint customers, the cable industry, need to move their businesses forward to achieve their objectives,” Kertzman said. “This combination does a tremendous amount for the cable industry to do that.”

Neither executive was prepared to discuss what role Nicolle would play in the new company or how the management structure would play out.