The assets of Kirkland-based Digeo Inc., a home-entertainment technology company backed by Microsoft co-founder Paul Allen, are slated be sold for $20 million to ARRIS Group Inc. under an agreement announced this afternoon. ARRIS says it would employ 75 of Digeo's employees in Kirkland and continue to develop and market Digeo's Moxi digital video recorder.

In an interview with TechFlash, Digeo Chief Executive Greg Gudorf said that ARRIS' involvement will lead to the the technology being deployed into more homes.

"The product lives, and the majority of the Digeo team carries it forward," said Gudorf. "That is a positive outcome." But the numbers tell a slightly different story.

Gudorf declined to say how much Digeo raised over the past decade, though it certainly surpassed the $20 million purchase price announced today. At one point, Digeo employed more than 275 people and in 2007 the company reportedly raised $36 million in a financing round.

paidContent put total funding in Digeo at about $110 million, which is peanuts compared to the estimated $8 billion Allen could lose on Charter. Still, $110 million isn't chump change.

Digeo fell on tough times last year, chopping its staff in half as it struggled to compete with larger players in the digital set top box market.

To date, the company has shipped about 500,000 DVRs, with bankrupt Charter Communications (also majority-owned by Allen) remaining one its largest cable customers.

Gudorf said Charter's bankruptcy has had little effect on the company.

"We continue to ship product to Charter in increasing volumes, and we are quite happy with the deployments," he said. "Charter is a customer and I have every expectation that they will continue to be."

David Postman, a spokesman for Vulcan, Allen's investment arm, declined to comment on the financial details of the Digeo sale.

"I know Paul is glad to see that the cutting-edge technology developed by Digeo will live on and that most of the employees of the company will continue to work on the product from Kirkland," he said. "Those are both good results, and give us confidence that we have found a good buyer."

Gudorf said the company decided to start looking for a buyer earlier this year after the release of its consumer versions. Previously, Digeo had focused on distributing the DVRs through cable companies such as Charter, BendBroadband, Time Warner Cable and others.

Beginning late last year, Digeo started selling the devices direct to consumers through its own Web site and Amazon.com. Gudorf said that strategy paid off with positive reactions from the press, which led to the acquisition interest.

Less than 10 employees will lose their jobs as part of the transaction, said Gudorf. Employees will continue to operate from the company's Kirkland office, he said.

Gudorf said he will stay with ARRIS during a transition period.

John Cook contributed to this report.