Arris Scoops Up Digeo

Cable transmission and video-on-demand supplier Arris Group has agreed to buy digital video-recorder (DVR) supplier Digeo in a cash deal worth roughly $20 million. The deal is expected to close in the fourth-quarter.

Paul Allen-backed Digeo had initially supplied its Moxi DVR set-top and unique user interface to Charter Communications but gained little traction with other cable operators as a supplier of leased set-top boxes. In recent years the Kirkland, Wash.-based firm shifted strategy and started selling Moxi as a high-end consumer DVR with abundant storage.

Arris says it will continue to develop and market the current line of Digeo DVR products, including Digeo's Moxi Cable DVR and consumer HD DVR, and that Moxi customers will continue to receive uninterrupted service and updates.

Arris, which acquired patents and video processing technology from EG Technology (EGT) earlier this month, says the Digeo deal will give it further expertise in video networking and help it deploy next-generation IP-based consumer video products and services.

"Several years ago we laid out a strategy to establish Arris as a leader in video networking," said Arris Chairman and CEO Bob Stanzione in a statement. "Our strategy includes both organic development and strategic acquisitions. The Digeo acquisition, along with our acquisition of EGT last month, has enhanced our ability to aggressively pursue end-to-end video delivery initiatives."

Suwanee, Ga.-based Arris will gain approximately 75 Digeo employees located in Kirkland. It says the addition of the Digeo engineering team will raise its research and development investment by approximately $3 million per quarter.

"As the global leader in broadband technology for the cable industry, Arris delivers the market position necessary to take the Moxi vision to the next level," said Digeo CEO Greg Gudorf in a statement. "Arris recognizes the value of adding Digeo's highly-innovative technology to its portfolio, allowing the company to integrate the Moxi line of products and services as core to its expansion into the digital home."