Scopus Video Networks Ltd Ord (MM) (NASDAQ:SCOP)
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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.