Aurora Networks Inc., an optical access solution provider for cable operators, is paying $46 million to acquire the “Cable Access” holdings of Harmonic Inc., a provider of video delivery infrastructure.
Harmonic’s Cable Access portfolio includes optical transmitters, amplifiers, receivers and nodes. Because the transaction is subject to customary closing conditions the deal is expected to be complete by the end of March 2013, the companies say.
“Acquiring the assets of Harmonic’s optical transport business extends our Access leadership position by adding to our footprint within the cable industry,” said Guy Sucharczuk, Aurora’s chairman, president and CEO. “This strategic move is an opportunity for us to further accelerate our innovations, continue to grow and ensure that the networks of current customers and expanded customer base from Harmonic can meet challenges today and well into the future,” he says.
Harmonic says it is not the market leader in the Cable Access product area, and there is limited strategic synergy between Cable Access and the company’s other higher growth product lines. Therefore, the decision to divest the Cable Access business reflects Harmonic’s commitment to the “Video Production and Playout,” “Video Processing,” and “Cable Edge” product areas, the company says.
“The sale of the Cable Access business enables us to sharpen our focus on our largest growth opportunities,” says Patrick Harshman, Harmonic’s president and chief executive officer. “Cable Access was Harmonic’s lowest margin product line and through this transaction, and the increase in our authorized share repurchase program, we will continue to drive growth in our core markets, expand our gross margin, reduce our outstanding shares, and position our business for stronger long-term earnings,” he says.