Imagine Communications Acquires RGB Networks

DALLAS—Imagine Communications announced a definitive agreement to acquire the assets of RGB Networks of Sunnyvale, Calif. The transaction terms were not disclosed.

Founded in 2001, RGB specializes in over-the-top video distribution and broadcast signal processing technologies. The product line includes a modular carrier-class MPEG-2 and -4 transcoder; software-based encoding/transcoding/packaging for adaptive bitrate video distribution to IP-enabled devices; a high-density ASI-to-GigE converter; the Simulcast Edge Processor for edge decoding, modulation and upconversion; and a broadcast network processor that performs “grooming, statistical multiplexing, transrating, ad and digital overlay insertion, program substitution and EAS,” according to RGB. The broadcast network processor, created with Trillithic’s EAS technology, won the vendors a TV Technology STAR Award in 2009.

RGB’s ABR packaging enables delivery of video-on-demand, cloud DVR and TV everywhere services without pre-packaging. It also has dynamic ad insertion technology. The two will allow Imagine to craft real-time, multiplatform, multiformat delivery of personalized advertising to nearly any device.

Most of the acquired assets will be integrated into the Imagine Communications advertising management and video infrastructure portfolio. Imagine also gains entrée to RGB’s footprint of 400 clients worldwide, which has very little overlap with Imagine’s, according to Imagine Chief Techology Officer Steve Reynolds. The product portfolios are similarly distinct and complementary, he said. Imagine will continue all the RGB products except for the MPEG-2 and -4 transcoder, which is based on first-generation technology. Reynolds said it would be moved into the Imagine Selenio transcoding portfolio, and existing customers will be moved toward upgrades.

RGB received a total of $72 million in funding from six investors, including Comcast Ventures, Mitsui & Co., Focus Ventures, Accel Partners, Institutional Venture Partners and Kleiner Perkins Caulfield & Byers, according to CrunchBase. William Randolph Hearst III was listed on Securities & Exchange Commission documents as a director in 2010, when the company received its last funding round of $20 million.

The transaction, subject to customary approvals and closing conditions, will include “the majority” of RGB Networks’ 100 or so employees, according to Imagine, but not RGB Chairman and CEO Jef Graham, Jeff Baumgartner said at Multichannel News. RGB has facilities in Sunnyvale and Austin, Texas. The Sunnyvale location will be consolidated with Imagine’s other operations there, chiefly, those of the OpenTV unit Imagine acquired last fall.

The RGB deal marks the first one of 2015 for Imagine and its fourth acquisition since Charlie Vogt took the reins of the company in mid-2013.

Imagine acquired the Eclipse advertising software line from OpenTV, a unit of the Kudelski Group, last October. Imagine acquired Digital Rapids last April, and was itself acquired by Harris Broadcast last December. Harris Broadcast was purchased from Harris Corp. by Los Angeles-based investment firm, The Gores Group in late 2012. It had three years to shed the Harris name and became Imagine last March after acquiring the transcoding specialist.

Pictured are Lou Mastrocola of RGB Networks, left, with Imagine CEO Charlie Vogt.

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