Harmonic confirms Omneon buy
Written by Chris Forrester
Sunday, 09 May 2010 10:10
Privately-owned video technology company Omneon is selling up to Harmonic in a deal valued at $274m in cash and stock.
Omneon specialises in the storage and processing of video content, while Harmonic is a leading provider of live and on-demand video delivery to PCs, TVs and mobile devices. Both companies are headquartered in Sunnyvale, California, in the heart of Silicon Valley.
Omneon's customers reportedly include the BBC, BSkyB, Comcast, Discovery, CBS and News Corp. The combined company will have annual revenues of more than US$500m. The agreement sees Harmonic paying US$190m in cash, and issue about 17.1m shares of its common stock. This represents an enterprise value of approximately US$274m, based on the closing price of Harmonic's stock on Wednesday.
“This proposed combination will position Harmonic to become a global leader in video infrastructure for the digital media industry," Harmonic president/CEO Patrick Harshman said in a statement. “Media companies are being driven by ever-increasing demand for video content coupled with consumers’ desire to consume video anytime and anywhere. At the same time, the dramatic growth of video delivery over broadband and wireless networks is blurring traditional boundaries between content producers and service providers. With our deep customer relationships with content producers and service providers, and with our market leading technologies that span content acquisition through delivery, we believe that our combined company will be uniquely positioned to capitalize on these trends and to accelerate revenue growth.”
Omneon has approximately 280 employees worldwide, and is based in Sunnyvale, Calif., with research and development facilities in Sunnyvale and Beaverton, Ore. Harmonic, also based in Sunnyvale, had 842 employees as of the end of 2009 and is planning to move to a new HQ in nearby San Jose later this year. Harmonic said there may be some redundancies between the two companies that will result in layoffs but that any staff reductions would be very minimal.
Omneon's investors include Accel Partners, Norwest Venture Partners, Advanced Technology Ventures, Invesco Private Capital, Meritech Capital, Intel Capital, Lucent Venture Partners, Centre Palisades Ventures, The Ignite Group and J.P. Morgan Chase & Co.