Joe,
Found this on C-Cube thread:
Harmonic to Acquire Divicom; Combination Creates Premier Provider of Open-Systems Solutions for Delivering Video, Voice and Data over Broadband Networks
BusinessWire, Wednesday, October 27, 1999 at 16:42
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 27, 1999--Harmonic Inc.
(NASDAQ:HLIT) today announced that it has entered into a definitive
agreement to acquire the Divicom business of C-Cube Microsystems
(NASDAQ:CUBE). This combination will position Harmonic as a leading
supplier of open-systems solutions for delivering video, voice and
data over a variety of network architectures.
Based upon Harmonic's closing price of $64.875 on October 26,
1999, the value of the transaction would be approximately $1.7
billion. Under the terms of the agreement between Harmonic and C-Cube,
the transaction will be structured as a tax-free exchange of stock.
C-Cube shareholders will receive 0.5427 shares of Harmonic stock for
each share of C-Cube. Prior to closing, C-Cube will sell or spin out
all of the assets and liabilities of its semiconductor division, after
which Harmonic will acquire Divicom with a merger of C-Cube into
Harmonic.
"Harmonic and Divicom are leading providers of open broadband
solutions in our respective market spaces," said Anthony Ley,
Chairman, President and Chief Executive Officer of Harmonic. "We
believe that the combination of our two companies is a major step
forward for Harmonic, Divicom and our customers."
"Divicom's strengths in digital video compression and our
strengths in cutting-edge fiber optics is a logical and exciting
combination," continued Ley. "Together, we can offer a more complete
digital and optical solution for cable operators worldwide, as well as
expand our penetration into telecommunications, satellite, wireless
and other emerging markets for broadband communications."
Divicom is a leading developer of high-quality standards-based
MPEG-2 encoding products and systems, and has emerged as the leading
provider of open solutions for digital video. Headquartered in
Milpitas, Calif., Divicom has approximately 425 employees and had
revenues of $133.8 million and operating income of $20.5 million for
the nine months ended September 30, 1999.
"We see this as an ideal union," said Tom Lookabaugh, Divicom
President. "Both organizations are technological innovators with
common corporate cultures and a shared vision of open solutions for
digital broadband communications. We are looking forward to joining
the Harmonic team."
Combination Advances Harmonic's Broadband Solution Strategy
With its METROLink(TM) DWDM system, scalable nodes, TRANsend(TM)
platform for local digital gateway applications, and CyberStream(TM)
system for delivering high-speed data over broadband networks,
Harmonic's products enable a range of interactive services such as
high-speed Internet access, telephony and video-on-demand.
The move to combine forces with Divicom further advances
Harmonic's strategic objective of providing flexible and efficient
delivery of video, voice and data to a broad range of network
operators.
"We are joining forces with Divicom to provide a standards-based
product portfolio. This combination will allow two premier broadband
equipment providers to pool resources to further advance the promise
of video, voice and data over cable, telco, satellite and wireless
networks," said Ley. "Going forward, we will leverage each other's
technical and market expertise to develop new products, technologies
and open-system solutions required to implement evolving network
architectures."
In the near term, the combination increases Harmonic's role in
the emergence of digital video services over cable, satellite, telco
and wireless networks. Long term, the combination increases Harmonic's
participation in video transmission over emerging IP networks.
Divicom's worldwide customer base includes BellSouth, CCTV,
Cablevision Systems, Canal+, DirecTV, EchoStar Communications,
ExpressVu, GTE, LIN Television, MediaOne, NTL, Optus, Telefonica,
Telenor, Telia, ONdigital, WGBH and US West.
"By combining resources, we will further enhance the top-tier
support our customers have come to expect," said Lookabaugh. "With our
joint talent pool and synergistic product lines, we will offer network
operators turn-key, high-quality encoding and transmission solutions."
The merger is subject to the approval of the stockholders of each
company, customary closing conditions, including applicable regulatory
clearances, and the prior disposition of C-Cube's semiconductor
business. The transaction will be accounted for as a purchase, and the
resulting goodwill will be amortized over a period of approximately
five years. Excluding goodwill charges, the combination is expected to
be accretive to earnings per share in the first year. The closing is
anticipated to take place in March 2000.
About Divicom
Divicom is a leading provider of open solutions for digital
television. Products include audio/video encoding, data broadcast
solutions, network management systems, consulting and integration
services. Based on the MPEG-2, DVB and ATSC international standards,
Divicom products enable digital video broadcasting over a variety of
networks including satellite, wireless, fiber and cable. Divicom is a
wholly-owned subsidiary of C-Cube (NASDAQ:CUBE), and is based in
Milpitas, Calif. Divicom can be reached at +1.408.944.6700 or at
divi.com.
About C-Cube
C-Cube is the industry leader in the development and delivery of
highly integrated digital video silicon and systems solutions.
C-Cube's Semiconductor Division delivers highly integrated digital
video silicon and systems solutions for the communications and
consumer electronics markets, including digital set-top boxes, VCD,
and DVD. C-Cube's Divicom Division is a leader in the deployment of
digital video networks. C-Cube is headquartered in Milpitas, Calif.
with offices in North America, Europe, and Asia. Its stock is traded
on the Nasdaq under the symbol CUBE. C-Cube can be reached at
+1.408.490.8000 or c-cube.com.
About Harmonic Inc.
Harmonic designs, manufactures and markets digital and fiber
optic systems that deliver video, voice and data over cable,
satellite, telco and wireless networks. These advanced solutions
enable cable television and other network operators to provide a range
of interactive broadband services that include high-speed Internet
access, telephony and video-on-demand.
Harmonic is headquartered in Sunnyvale, Calif., where it also
operates an R&D center and a manufacturing facility, and has a sales
and support center in the U.K. The company also operates its Harmonic
Data Systems subsidiary and an R&D center in Israel. In addition, the
company maintains several sales and support centers worldwide.
Harmonic is ISO 9001-certified and its stock is traded on the Nasdaq
stock market under the symbol "HLIT." For more information, check the
company's website at www.harmonicinc.com.
This press release contains forward-looking statements,
including, but not limited to, the anticipated closing date, the
accounting and tax treatment of the transaction, and the potential
benefits of the merger, including the expectation of offering a more
complete digital and optical solution for cable operators and expanded
penetration into other markets for broadband communications as well as
other advancements to Harmonic's broadband solution strategy. These
forward-looking statements involve a number of risks and uncertainties
including, but not limited to, the failure of C-Cube to sell or spin
out its semiconductor division, failure to obtain shareholder approval
or regulatory consents, potential disruption of business arising from
customer or employee uncertainty, the accounting and tax treatment of
the merger transaction, the ability to successfully integrate the
businesses of Harmonic and Divicom, and the failure to realize the
potential benefits of the merger, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements as a result of the risk
factors set forth in documents that Harmonic files with the SEC,
specifically reports on Form 10-K and 10-Q.
Editor's Note: Product and company names used here are trademarks
or registered trademarks of their respective companies.
CONTACT: Harmonic Inc.
Robin N. Dickson, Chief Financial Officer, 408/542-2500
or
Harmonic Inc.
Joyce Smaragdis, Public Relations Manager, 408/542-2692
or
StreetConnect
Michael Newman, Investor Relations, 408/542-2760
KEYWORD: CALIFORNIA INTERNATIONAL EUROPE AFRICA/MIDDLE EAST
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS ENTERTAINMENT HARDWARE
ELECTRONIC GAMES/MULTIMEDIA TELECOMMUNICATIONS MERGERS/ACQ
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Robert
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