Wednesday, July 4, 2007

ECI Buyout

ECI has approved its acquisition by a group of investment companies that includes Swarth Investments and Ashmore Investment Management for $1.2 billion. ECI expects this deal to close by the end of 2007.

ECI has done well using IPTV to maintain and improve its position with major carriers such as France Telecom and Deutsche Telekom. It now has the strategic problem of figuring out how to maintain its growth and position now that ADSL is near or at its peak.

This buyout gives ECI's current major shareholders an opportunity to get while ECI is in a strong position. Its new owners may have a different strategy in mind, such as splitting the company up and selling off the pieces.

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