SeaChange Acquires Poland-Based DCC Labs

SeaChange International has bought DCC Labs, a Warsaw, Poland-based set-top and multiscreen device software developer and integrator, to advance SeaChange’s set-top, multiscreen subscriber device and application strategies.

The transaction closed on May 6, and SeaChange paid approximately $8 million in cash and SeaChange stock for DCC Labs. The company said DCC Labs is expected to contribute an additional several million dollars of revenue annually to SeaChange. The transaction is expected to be accretive in fiscal 2017, as well as provide an anticipated one-year payback through synergies and cost savings that SeaChange will begin to realize immediately. The transaction includes a lock-up provision for the SeaChange stock that unwinds over a three-year period.

DCC Labs was owned in part by 7bulls.com Sp. z o.o., a private group of software development and integration companies focused on delivering advanced technologies and IT solutions for large enterprises throughout the Americas, Asia and Europein a range of industries including finance, automotive, retail and media.

DCC Labs, with more than 70 engineers, has commercially deployed projects supporting millions of set-tops, mobile devices and smart TVs, that span the television service provider industry’s Reference Design Kit (RDK), as well as Android and Linux operating systems.

In 2015, SeaChange engaged DCC Labs to support a major set-top development project for a large European cable operator, resulting in deployment of a user interface and an RDK 2.1-based home video gateway for field trial tests within four months of engagement. Subsequently, SeaChange engaged DCC Labs to assist with improving quality and providing enhancements for another European cable operator’s deployed home video gateway.

“Through our successful collaboration in the field, SeaChange determined that DCC Labs’ experience and strengths are exceptionally well-aligned with our strategy to operate more efficiently and rapidly roll out high-value, front-end product innovations,” said Ed Terino, CEO, SeaChange.  “SeaChange is now better positioned to serve the global RDK licensee community, as well as fulfilling service providers’ growing desire to focus on a select set of vendors to support their video infrastructure from the back-end all the way through to set-tops, mobile devices and the subscriber experience.”

SeaChange said the acquisition of DCC Labs will allow it to optimize the operations of its In Home business, developer of deployed software solutions including the SeaChange Nucleus home video gateway. In conjunction with the acquisition of DCC Labs, SeaChange commenced a workforce reduction within its In Home engineering and services organization, which is anticipated to achieve $8 million in annualized cost savings. DCC Labs CEO Marek Kielczewski, who has led that company through a period of growth since 2009, has transitioned to the role of SVP of consumer premises equipment software and will lead SeaChange In Home.

In addition to enhancing SeaChange’s capabilities for software development and integration through project management to testing, the DCC Labs acquisition brings market-ready products, including an optimized television software stack for Europe’s DVB (digital video broadcasting) community and an HTML5 framework for building future-proof user interfaces for CPE devices.