US-based video delivery infrastructure provider Harmonic Inc. has agreed to sell its cable access business to Aurora Networks for US$46m in cash.
The sale was part of Harmonic’s wider strategy to focus on areas in which it holds a market share…
US-based video delivery infrastructure provider Harmonic Inc. has agreed to sell its cable access business to Aurora Networks for US$46m in cash.
The sale was part of Harmonic’s wider strategy to focus on areas in which it holds a market share leadership position, including its video production and playout, video processing and cable edge product areas.
Harmonic argues that its cable access business was not a market leader and that it had limited synergies with the company’s other operations. The cable access business generated US$52.9m of net revenue in 2012 with a gross margin of approximately 30%.
Net proceeds from the transaction will be used to increase the company’s current share repurchase programme. In its full year 2012 results, Harmonic announced an expansion to its existing share buyback plan by US$75m.
“The sale of the cable access business enables us to sharpen our focus on our largest growth opportunities,” said Patrick Harshman, president and chief executive. “Cable access was Harmonic’s lowest margin product line, and through this transaction and the increase in our authorized share repurchase program, we will continue to drive growth in our core markets, expand our gross margin, reduce our outstanding shares, and position our business for stronger long-term earnings.”
The transaction is subject to customary closing conditions and is expected to be completed by the end of the first quarter of 2013.
