Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: DiViT who wrote (46924)	10/28/1999 2:37:00 PM
From: Black-Scholes	Read Replies (1) \| Respond to of 50808

It doesn't get much more bullish than this: Harmonic and DiviCom--Looks Like A Match Made in Heaven There is tremendous synergy in the Harmonic-DiviCom combination, in our view, and we expect the combined company to emerge as the category killer in supplying next-generation digital video and broadband communications systems to cable, satellite and terrestrial broadcast networks. A fast-growing supplier of fiber optic transport systems to cable TV operators, Harmonic has little product or customer overlap with DiviCom. Accordingly, the cross-selling opportunities look outstanding to us right off the bat, especially in the cable TV and satellite markets. In particular, both companies are attracted by the ability to offer a total package to cable operators--everything from head-end gear to fiber optic transport to neighborhood nodes--all based on open solutions. We expect the companies, by joining forces, to drive the adoption of standards-based technology in the digital video and broadband markets--a trend that most operators appear to be recognizing as the way of the future--to the detriment of proprietary players such as General Instrument (GIC: $50 1/2) Scientific-Atlanta (SFA: $52 1/4). On a pro forma combined basis, Harmonic-Divicom had revenue and operating income of $255 million and $36 million, respectively, for the first nine months of 1999. Excluding one-time charges and amortization of goodwill, the transaction is expected to be accretive in 2000. Given the strength of the individual companies and the likely synergies that the merger should create, we expect the combined company could achieve a growth rate north of 50% in 2000.