Dow Jones Business News
Communications-Equipment Maker Harmonic Announces $1.5 Billion Deal
10/27/1999
Dow Jones Business News
(Copyright (c) 1999, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Harmonic Inc., a maker of fiber-optic transmission equipment for cable television networks, late Wednesday announced plans to acquire C-Cube Microsystems Inc., a supplier of services and chips for digital video devices, in a stock deal valued at $1.5 billion.
Harmonic plans to acquire the Divicom services arm of C-Cube and said C-Cube will sell or spin off its chip operations before the acquisition is completed.
C-Cube (CUBE) shareholders will receive 0.5427 Harmonic share for each of their shares. Shares of Harmonic (HLIT) fell $5, or 7.7%, to settle at $59.875 Wednesday. C-Cube had about 45.021 million shares outstanding in the third quarter.
"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," Harmonic said.
"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."
"Divicom 's strengths in digital video compression and our strengths in cutting-edge fiber optics is a logical and exciting combination," Ley added. "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."
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. Harmonic is headquartered in Sunnyvale, Calif.
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