Paul Allen’s Digeo Bought by Arris for $20M

Kirkland, WA-based Digeo, a 10-year-old home entertainment company backed by Microsoft co-founder Paul Allen, has been sold to Arris, a broadband communications firm based in Suwanee, GA, for about $20 million in cash.

Digeo is known for its high-definition digital video recorder, called Moxi. The acquisition gives Arris expertise, intellectual property, and talent in video networking and multimedia services delivery. Arris will gain about 75 Digeo employees (mostly engineers) in Kirkland, which will raise its R&D costs by about $3 million per quarter, the company said.

“Arris delivers the market position necessary to take the Moxi vision to the next level,” said Digeo’s CEO, Greg Gudorf, in a statement. “I am extremely pleased that the Digeo team will continue to drive the evolution of the Moxi platform.”

But observers point out that the purchase price means a substantial loss on the investment for Allen. PaidContent reports Digeo’s total funding was more than $110 million. In an interview with TechFlash, Gudorf said fewer than 10 Digeo employees would lose their jobs in the acquisition, and that he will stay with Arris during the transition. The news of Digeo’s layoffs was first reported by the Seattle Times.

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