Harmonic Inc.'s $247 million buy of Omneon creates an end-to-end video solution for some of the world's top media companies looking for a digital solution for storage, processing and delivery. Harmonic's distribution encoders help operators provide three-screen delivery of live and on-demand content; Omneon specializes in storage and processing of video content and includes among its customers BBC, BSkyB, CBS, Comcast, Discovery Communications, Echostar, NBC Universal, News Corporation, Televisa, Turner Broadcasting System, Viacom and many other leading media companies worldwide.
Omneon had revenues in 2009 of $105 million, two-thirds of which was outside the U.S.
Under the terms of the definitive agreement, which both boards have approved and was announced at COB Thursday, Harmonic (NASDAQ: HLIT) will pay $190 million in cash and issue approximately 17.1 million shares of its common stock. That's the approximate $274 million value based on the closing price of Harmonic common stock on May 5, and is net of Omneon’s cash balances which are expected to be approximately $32 million at closing. The company said it expects the deal to close in the third quarter after approval of Omneon's stockholders; of which Harmonic already has the backing of a majority.
"This proposed combination will position Harmonic to become a global leader in video infrastructure for the digital media industry," said Patrick Harshman, President and CEO of Harmonic. "Media companies are being driven by ever-increasing demand for video content coupled with consumers' desire to consume video anytime and anywhere. At the same time, the dramatic growth of video delivery over broadband and wireless networks is blurring traditional boundaries between content producers and service providers. With our deep customer relationships with content producers and service providers, and with our market leading technologies that span content acquisition through delivery, we believe that our combined company will be uniquely positioned to capitalize on these trends and to accelerate revenue growth."
Omneon employs about 280 people worldwide, and is headquartered in Sunnyvale, Calif., with R&D facilities in Sunnyvale and Beaverton, Ore.
"The combined company will have industry-leading technology and expertise in video compression, processing and delivery, video-optimized storage, production and playout servers, and media management," said Suresh Vasudevan, CEO of Omneon, who is expected to stay on, along with most of the management team, after the closing.
- see this release
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