Harmonic Announces Definitive Agreement to Acquire Scopus
December 23 2008 - 9:03AM
Business Wire
Harmonic Inc. (NASDAQ: HLIT) and Scopus Video Networks Limited
(NASDAQ: SCOP), a global provider of digital video networking
solutions, today announced the signing of a definitive agreement
pursuant to which Harmonic will acquire Scopus. The acquisition
will extend Harmonic�s worldwide customer base and strengthen its
market and technology leadership, particularly in international
video broadcast, contribution and distribution markets. Under the
terms of the definitive agreement, which has been approved by the
Board of Directors of both companies, Harmonic will pay $5.62 in
cash for each outstanding share of Scopus, representing an
enterprise value of approximately $51 million, net of Scopus� cash
and short-term investments. The proposed acquisition is subject to
customary conditions, regulatory approvals and the approval of
Scopus� shareholders, and is expected to close in the latter part
of the first quarter of 2009. Harmonic has received voting
agreements supporting the proposed acquisition from shareholders
representing approximately 50% of Scopus� outstanding shares.
Harmonic expects to realize cost synergies upon full integration of
Scopus of $8-10 million on an annualized basis, making the
transaction accretive to Harmonic�s non-GAAP earnings in 2009,
exclusive of the amortization of intangibles and non-recurring
charges such as restructuring and transaction costs. Harmonic will
determine the appropriate purchase accounting for the transaction
at closing and, accordingly, cannot reasonably estimate the impact
on GAAP earnings at this time. See �Use of Non-GAAP Financial
Measures� below. For the first nine months of 2008, Scopus reported
revenues of $55.4 million, an increase of 35% over the comparable
period of the prior year. Approximately 79% of these revenues were
outside the United States, with no single customer representing
more than 10% of total revenues. Scopus has approximately 300
employees worldwide. �This acquisition extends Harmonic�s
diversification strategy, providing us with an expanded
international sales force and customer base, particularly in video
broadcast, contribution and distribution markets, as well as
complementary video processing technology and expanded research and
development capability,� said Patrick Harshman, President and Chief
Executive Officer of Harmonic. �Like Harmonic, Scopus has strong
gross margins and a proven track record of innovation and growth.
By combining our two companies, we see significant opportunities
for product, sales and cost synergies.� �The combination of
Harmonic and Scopus will further extend Harmonic�s video delivery
leadership,� said Yaron Simler, Chief Executive Officer of Scopus.
�Harmonic brings its powerful customer relationships, brand
reputation, technology leadership and financial resources. Scopus
brings its highly skilled employees, proven distribution channels,
strong customer relationships and sales momentum in emerging
international markets. Scopus� exciting new video products,
including our next generation integrated receiver processor (IRP)
platform, are a great fit with Harmonic�s portfolio of
industry-leading products and solutions. We see this transaction as
very beneficial for the customers and employees of both companies.�
Conference Call Information Harmonic will host a conference call to
discuss the Scopus acquisition on Tuesday, December 23, 2008, at
7:00 a.m. Pacific (10:00 a.m. Eastern). A listen-only broadcast of
the conference call can be accessed on the Company�s website at
www.harmonicinc.com or by calling +1-706-634-9047 (conference
identification code 79010064). The replay will be available after
10:00 a.m. Pacific at the same website address or by calling
+1-706-645-9291 (conference identification code 79010064). About
Harmonic Inc. Harmonic Inc. is a leading provider of versatile and
high performance video solutions that enable service providers to
efficiently deliver the next generation of broadcast and on-demand
services including high definition, video-on-demand, network
personal video recording and time-shifted TV. Cable, satellite,
broadcast and telecom service providers can increase revenues and
lower operational expenditures by using Harmonic�s digital video,
broadband optical access and software solutions to offer consumers
the compelling and personalized viewing experience that is driving
the business models of the future. Harmonic (NASDAQ: HLIT) is
headquartered in Sunnyvale, California with R&D, sales and
system integration centers worldwide. The Company�s customers,
including many of the world�s largest communications providers,
deliver services in virtually every country. Visit
www.harmonicinc.com for more information. About Scopus Video
Networks Limited Scopus Video Networks Limited (NASDAQ: SCOP)
develops, markets, and supports digital video networking solutions
that enable network operators to offer advanced video services to
their subscribers. Scopus� solutions support digital television,
HDTV, live event coverage, and content distribution. Scopus'
comprehensive digital video networking solutions offer intelligent
video gateways, encoders, decoders, and network management
platforms. The company's solutions are designed to allow network
operators to increase service revenues, improve customer retention,
and minimize capital and operating expenses. Scopus� customers
include satellite, cable, and terrestrial operators; broadcasters;
and telecom service providers. Scopus� solutions are used by
hundreds of network operators worldwide. More information is
available at http://www.scopus.net. Important Information In
connection with the proposed transaction, Scopus will prepare a
proxy statement to be delivered to its shareholders, and intends to
file such proxy statement with the Securities and Exchange
Commission (SEC). Before making any voting or investment decision
with respect to the transaction, investors and security holders of
Scopus are urged to read the proxy statement and the other relevant
materials when they become available because they will contain
important information about the transaction. The proxy statement
and other documents may be obtained for free by directing such
request to Scopus Investor Relations, telephone: +1-646-201-9246 or
on Scopus� Web site at http://www.scopus.net. Forward-Looking
Statements Some of the statements contained in this release are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which statements
involve risks, uncertainties and assumptions, including those
regarding Harmonic�s future plans for the Scopus business, the
expected closing date of the acquisition, the expected benefits and
costs of the acquisition, management plans relating to the
acquisition, the ability to complete the acquisition considering
the various closing conditions (including those conditions related
to regulatory approvals), the expectations as to the growth
opportunities from the acquisition of the Scopus business and
Harmonic�s expected plans for the integration of Scopus products.
The statements contained in this release that are not purely
historical are forward-looking statements including, without
limitation, statements regarding our expectations, beliefs,
intentions or strategies regarding the future. In some cases, you
can identify forward-looking statements by terminology such as
�may,� �will,� �should,� �expects,� �plans,� �anticipates,�
�believes,� �intends,� �estimates,� �predicts,� �potential,� or
�continue� or the negative of these terms or other comparable
terminology. These statements are based on the current expectations
or beliefs of management of Harmonic and are subject to uncertainty
and changes in circumstances that, if they were to never
materialize or prove incorrect, could cause actual results to
differ materially from those projected, expressed or implied in the
forward-looking statements. Factors that could cause Harmonic�s
actual results or outcomes, levels of activity, performance or
achievements, including the realization of expected financial and
other effects of the acquisition, to be materially different from
those anticipated in this release include among others, the
inability to integrate successfully Scopus within Harmonic or to
realize synergies from such integration; costs related to the
acquisition of Scopus; inability to obtain necessary regulatory
approval for the acquisition or to obtain them on acceptable terms;
failure to retain key employees; the economic environment of the
industries in which Harmonic and Scopus operate, as well as facts
relating to Scopus that may impact the timing or amount of
synergies they can be realized and that are unknown to Harmonic;
and other factors affecting the operation of the respective
businesses of Harmonic and Scopus. More detailed information about
these factors are described in Harmonic�s filings with the SEC
including its annual report on Form 10-K for the year ended
December 31, 2007, and its quarterly report filed on Form 10-Q for
the third quarter of 2008. All forward-looking statements included
in this release are based on information available to Harmonic on
the date thereof, and Harmonic assumes no obligation to update any
such forward-looking statements. Use of Non-GAAP Financial Measures
In establishing operating budgets, managing its business
performance, and setting internal measurement targets, Harmonic
excludes a number of items required by GAAP. Management believes
that these accounting charges and credits, which are non-cash or
non-recurring in nature, are not useful in managing its operations
and business. Historically, Harmonic has also publicly presented
these supplemental non-GAAP financial measures in order to assist
the investment community to see Harmonic �through the eyes of
management,� and thereby enhance understanding of its operating
performance. The presentation of non-GAAP information is not
intended to be considered in isolation or as a substitute for
results prepared in accordance with GAAP and is not necessarily
comparable to non-GAAP results published by other companies.
EDITOR�S NOTE � Product and company names used herein are
trademarks or registered trademarks of their respective owners.
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