Pace is to merge its Pace Europe and Pace Networks businesses into a single unit, the set-top developer said in an interim statement.
Publishing its strategic review, led by new chairman Allan Leighton, Pace said it would build on software and service platforms to become a leading provider of user experience and customer management solutions. The former Royal Mail chairman launched his review in May.
The company plans to target a number of efficiency savings, but it admitted some of these would only last into 2013, given the issues currently surrounding the supply of hard disk drives.
Pace CEO Neil Gaydon told Broadband TV News that while Western Digital were affected by flooding at two of their factories in Thailand, Seagate was also impacted, because the hard drive manufacturer received components from different suppliers in Thailand. Gaydon explained that prices had risen by between 50 and 100%. “Because we ship a million PVRs every quarter, we can ship some, and it helps that we are one of the biggest suppliers in the world, so we’re getting some, but not as many as we would like.” The effect is likely to impact by between $35 and $50 million (€25.88 and €36.97 million) on next year’s profits.
Were it not for the hard drive issue, Gaydon said Pace would have been in line with its mid-year guidance.
Gaydon explained that Pace Enterprise had been acting as an incubation division. “It’s where we put Bewan and Latens, so those businesses now have customers shipping product, so we thought we could accelerate some of those software and services by having them in the one group.”
Pace International will cover all regions outside of America, which will continue to have its own dedicated division for the market. The cost of the merger is expected to be $12 million.
Gaydon said it was too early to say whether there would be any job losses, given that merger in divisions was currently the subject of a staff consultation.
As previously reported in Broadband TV News, Pace Europe President Mathias Hautefort left in May to be replaced by Mark Loughran, the former Nokia UK boss, brought in to head the network division.
Under proposals put forward in the Leighton review, sales teams will be encouraged to cross sell and build deeper product knowledge that is said to have been lacking.
