Ericsson acquires Envivio for $125 million, partners with AT&T on DirecTV tech transition

Ericsson took the next step in the latest round of video industry consolidation, announcing it has acquired multiscreen encoding and compression provider Envivio for about $125 million in a cash tender transaction. The company also will take the lead in integrating DirecTV's satellite assets with AT&T's U-verse assets. The deal is expected to close in the fourth quarter of 2015.

Acquiring Envivio helps Ericsson further put into place the pieces to build a multiscreen empire. The company made its first big foray into IPTV when it bought Mediaroom from Microsoft in 2013; it added media services company Red Bee Media and TV Anywhere provider Azuki shortly afterward. Ericsson also added Fabrix Systems, a cloud storage platform provider, in October 2014. Rolling Envivio into the mix will give it more direct control over the compression component of IP video delivery and, potentially, increase its competitiveness in the video delivery segment.