Harris could sell stake in Stratex unit
Tuesday December 9, 7:13 am ET
Harris looking at alternatives for Harris Stratex Networks, could sell stake
MELBOURNE, Fla. (AP) -- Information-technology company Harris Corp. said Monday it is evaluating strategic alternatives for its majority-owned subsidiary Harris Stratex Networks, including a sale of its shares.
Harris owns 56 percent of the unit, which provides services for mobility and broadband networks.
"Alternatives under consideration include a spin-off, split-off, secondary public offering, or a sale of all or part of our shares," said Howard L. Lance, chairman, president and chief executive, in a statement.
The subsidiary was formed at the beginning of last year through the combination of Harris Microwave Communications Division and Stratex Networks Inc. When it was formed, Harris agreed to some limitations on changes in its ownership in the subsidiary before January 26, 2009.
Lance added the unit is not a strong strategic fit with the rest of the Melbourne, Fla., company's businesses.
Cowen & Co. analyst Gautam Khanna, who rates Harris "Neutral," said in a note on Tuesday that the announcement isn't surprising since the unit's financial performance has been weak and its market positioning is also weak.
"Although the form of exit is uncertain," he wrote, "We suspect the process is far along as Harris wouldn't have made the announcement otherwise, the company has hired Morgan Stanley to manage the exit and Harris's lock-up expires in January 2009."
He estimated Harris' stake in the unit would raise $48 million of net cash and eliminate $331 million of minority interest from Harris' books.
"The exit is a modest plus in our view, as the business was non-core and an underperformer," he wrote. "The financial impact is apt to be de minimus."
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Harris may sell Stratex unit
Mon Dec 8, 2008 7:29pm EST
SAN FRANCISCO, Dec 8 (Reuters) - Communications equipment maker Harris Corp said on Monday it may sell its microwave technology subsidiary Harris Stratex Networks Inc, saying the unit is not a good fit with the rest of the company.
Harris is also mulling other options for Stratex including a spin-off or a secondary public offering.
Harris currently owns 56 percent of Stratex, which was formed in early 2007 when Harris bought Stratex Networks and combined it with its microwave communications division.
At the time of the deal, Harris agreed to certain limitations on changes in its ownership in Stratex prior to Jan. 26, 2009.
"Harris Stratex Networks has made significant progress since its formation, but we do not believe the business has a strong strategic fit with the rest of the Harris portfolio," said Howard Lance, Harris' chief executive, in a company release.
A Harris spokesperson declined to provide any further details, and declined to provide a timeline for any disposition of Stratex.
Stratex provides microwave technology to telecommunications companies.
In its fiscal first quarter ended Sept. 26, Stratex reported an adjusted profit of $11.2 million, or 19 cents a share -- a slight increase from the year-ago period. Revenue rose 14 percent.
Shares of Melbourne, Florida-based Harris rose $2.13, or 6.5 percent, to close at $35.12. Shares of Morrisville, North Carolina-based Harris Stratex closed down 36 cents, or 8 percent, at $4.12. (Reporting by Gabriel Madway; Editing by Gary Hill)
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Harris Corporation Evaluating Strategic Alternatives Related to Its Ownership in Harris Stratex Networks, Inc.
Monday December 8, 5:44 pm ET
MELBOURNE, Fla., Dec. 8 /PRNewswire-FirstCall/ -- Harris Corporation (NYSE: HRS), an international communications and information technology company, announced today that it is evaluating strategic alternatives related to its majority-owned subsidiary, Harris Stratex Networks, Inc. (Nasdaq: HSTX). Harris currently owns 56 percent of Harris Stratex Networks, which was formed January 26, 2007, through the combination of the Harris Microwave Communications Division and Stratex Networks, Inc. At the time of the combination, Harris agreed to certain limitations on changes in its ownership in Harris Stratex Networks prior to January 26, 2009.
"We will evaluate a number of different alternatives to determine which can provide the greatest value to Harris shareholders," said Howard L. Lance, chairman, president and chief executive officer of Harris Corporation. "Alternatives under consideration include a spin-off, split-off, secondary public offering, or a sale of all or part of our shares.
"Harris Stratex Networks has made significant progress since its formation, but we do not believe the business has a strong strategic fit with the rest of the Harris portfolio," Lance said. "A strong management team is in place and capable of taking the company forward. As the largest independent provider of wireless transmission solutions, the company is positioned for long-term success. Significant investments have been made in new technology platforms to address the global transition to IP networks, the evolution to 4G technologies, and the continuing expansion of wireless infrastructure in emerging markets."
About Harris Stratex Networks, Inc.
Harris Stratex Networks, Inc. is a leading specialist in backhaul solutions for mobility and broadband networks. The company offers reliable, flexible and scalable wireless network solutions, backed by comprehensive professional services and support. Harris Stratex Networks serves all global markets, including mobile network operators, public safety agencies, private network operators, utility and transportation companies, government agencies and broadcasters. For more information, visit www.HarrisStratex.com.
About Harris Corporation
Harris is an international communications and information technology company serving government and commercial markets in more than 150 countries. Headquartered in Melbourne, Florida, the company has annual revenue of $5.4 billion and 16,000 employees -- including nearly 7,000 engineers and scientists. Harris is dedicated to developing best-in-class assured communications® products, systems, and services. Additional information about Harris Corporation is available at www.harris.com. |
