Ericsson announced its agreement to acquire software-based video processing and delivery solutions company, Envivio.

According to a report by Reuters, Envivio is the global leader in software-based video encoding and has an installed base of over 400 TV service provider and content owner customers.

"We want to extend our leadership in compression, combining together hardware and software in order to be able to address all possible use cases and give the most abilities to our customers using the best resources for the use cases that they [present]," according to Elisabetta Romano, vice president and head of TV and media business support solutions at Ericsson.

As reported by Fierce Cable, Ericsson has taken the latest step in the latest round of video industry consolidations. The company executives made the announcement at the IBC Show in Amsterdam.

With Ericsson acquiring Envivio, the company further puts its essential pieces in building a multiscreen empire. The company was first reported to make its foray into IPTV when it bought Mediaroom from Microsoft in 2013.

Shortly, Ericsson then added media service company Red Bee Media and TV Anywhere provider Azuki. The Swedish telecom giant also added cloud storage provider, Fabrix System to complete its multiscreen takeover.

But now with Envivio, Ericsson will have direct control over the compression component of IP video delivery and eventually, increase its competitiveness in the video delivery industry.

With the announcement, America's Markets reported that Envivio's shares more than doubled Thursday.

The shares of the company were up 114 percent or $2.16 to $4.06 in Thursday afternoon's trading.

The board of directors of Envivio has agreed to recommend that their stockholders tender their shares to Ericsson in a tender offer. The shareholders of the video processing company will receive $4.10 a share in cash.

The deal is expected to be sealed before the end of the year.