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TANDBERG Television Acquires SkyStream Networks


08 February 2006, TANDBERG Television ASA (TAT.OL) has today, 8th February, 2006, signed a definitive agreement to acquire SkyStream Networks, Inc. (SkyStream), the Sunnyvale, CA headquartered leader in IPTV infrastructure solutions.

Business Activity
SkyStream employs approximately 100 people across North America and in the UK, China and Korea. Founded in July 1996, SkyStream has delivered 7 years of sequential revenue growth and achieved profitability in Q4 2005. The company posted unaudited 2005 revenues of approximately MUSD 30.7, up 43% on 2004, generating a gross margin of 65% for the year.

A recognized pioneer in IP content delivery, SkyStreamís high density Mediaplex-20(tm) and iPlex(tm) switched digital video headends for MPEG-2/MPEG-4 AVC encoding and transcoding are used extensively by IPTV operators in Asia, Europe and the US. These solutions deliver lower cost, high-density solutions to cable and satellite operators and will be a valuable extension to TANDBERG Televisionís DTH head end systems and its industry leading MPEG-4 AVC HDTV compression solutions. In addition, SkyStreamís zBand(tm) content delivery software for push on-demand services is highly complementary to the TANDBERG N2 On-Demand solutions and gives the company a complete ípush and pullí on-demand offering.

SkyStream is a privately held company and has secured funding from 3i US, Time Warner Investments, Amerindo Investment Advisors, Crosslink Capital, Granite Global Ventures, IVP, Integral Capital Partners, Mayfield, Norwest Venture Partners, WestBridge Ventures and Shaw Ventures.

Transaction Rationale
The move brings together two highly respected players in digital video delivery and will extend TANDBERG Televisionís position as the global leader in the professional video compression market. Through the acquisition TANDBERG Television will expand its technology offering for IPTV and also for the cable, satellite DTH and on-demand markets with a highly complementary product set from SkyStream, the industryís fastest-growing provider of IPTV infrastructure solutions with over 300 customers worldwide.

The acquisition of SkyStream will increase TANDBERG Televisionís global sales presence and strengthen its successful commercial organizations in North America, EMEA and APAC. TANDBERG Television will also add over 50 talented SkyStream engineers to its award-winning research and development team.

Purchase Consideration
The total purchase consideration will be MUSD 80, made up of a mixture of TANDBERG Television shares and cash. SkyStreamís unaudited balance sheet as at 31 December 2005 has net current assets of approximately MUSD 6.6 and long term debt of MUSD 1.6 which will be cleared on completion of the acquisition out of the purchase consideration. The cash consideration will be approximately MUSD 78 (subject to final closing adjustments). The share value element of the consideration will consist of approximately MUSD 2 of shares at closing. The actual number of shares will be determined based on an average price of TANDBERG Television shares for the 10-day period ending 5 days prior to closing.

Escrow Fund
As part of the total purchase consideration, a cash Escrow Fund has been set up consisting of approximately MUSD 9, with MUSD 1 to cover net current asset adjustments and MUSD 8 to cover potential general indemnification claims for a period of one year.

Conditions for Closing
There are a number of standard conditions to closing, both legal and regulatory, including approval by US authorities of the partiesí Hart-Scott-Rodino Antitrust pre-merger notification filing, and satisfactory completion of due diligence. The transaction is expected to close not later than April 2006.

Historical Accounting Changes
TANDBERG Television expects, based on the financial due diligence conducted, that there will be no requirement to make material historical changes to the accounts under IFRS.

Employee Retention
TANDBERG Television has always considered its employees to be highly important to the future success of the combined business and as such will ensure that a comprehensive, market competitive set of employee benefits, designed to attract and retain world-class professionals continues to be made available.

Oslo, Norway / Southampton, UK 8th February 2006

The Board of Directors of TANDBERG Television ASA

Jan Chr. Opsahl, Chairman Eric Cooney, CEO


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