Harmonic has become the latest company to sign an agreement with Comcast, giving the operator the ability to buy shares in the vendor based on specific performance benchmarks.
The so-called warrant agreement is outlined in a filing made by Harmonic with the Securities Exchange Commission. It gives Comcast the opportunity to buy up to 7,816,162 shares of Harmonic common stock at a price of $4.76 per share. The price is determined by the market cap for Harmonic in the 10 days preceding the agreement. It values Harmonic at around $37.2 million.
“This agreement is a significant validation of our new product investment strategy,” Patrick Harshman, Harmonic’s president and CEO, said in a statement. “We are well positioned to further strengthen our partnership with Comcast, drive new growth and create value for our stockholders.”
In its press release announcing the deal, Harmonic said Comcast is able to buy stock based on deployment milestones relating to the virtual Converged Cable Access Platform (CCAP) product CableOS and other products.
In July, Arris announced a warrant agreement that will allow Comcast to buy up to 8 million of Arris' ordinary shares over the next two years.
Included in the agreement is a requirement that a set percentage of the purchases must be for products and services included in Arris' Network and Cloud segment, Arris disclosed in an SEC filing.
And in March, the MSO entered into a warrants agreement with the vendor that makes its X1 voice remote, Universal Electronics Inc. (UEI). The vendor also has contracts to make home-automation gadgets for Comcast.
"Comcast's right to exercise the warrant is subject to vesting during three successive two-year periods (with the first two-year period commencing on January 1, 2016) during which Comcast must purchase (in each two-year period) no less than $260,000,000 in goods and services from the Corporation and its affiliates (as such term is defined in the warrant agreement)," an 8-K filing said.
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