Harmonic to Acquire Omneon

They aim to create a video playout and processing giant.
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They aim to create a video playout and processing giant.

Video processing tools provider Harmonic Inc. is snapping up fellow Silicon Valley company Omneon for about $274 million in cash and stock, aiming to create a video playout and processing giant.

“This proposed combination will position Harmonic to become a global leader in video infrastructure for the digital media industry,” said Patrick Harshman, Harmonic president and CEO.

Omneon’s customer base includes the BBC, BSkyB, CBS, Comcast, Discovery Communications, Echostar, NBC Universal, News Corp, Televisa, Turner Broadcasting System, Viacom and many other leading media companies and government agencies worldwide. For the year ended Dec. 31, 2009, Omneon’s revenues were approximately $105 million, of which 67 percent was outside the United States. Omneon’s gross margin was 58 percent in 2009 and it has approximately 280 employees worldwide.

“The combined company will have industry-leading technology and expertise in video compression, processing and delivery, video-optimized storage, production and playout servers, and media management,” said Suresh Vasudevan, CEO of Omneon. “Not only are the technologies complementary, but we see unique opportunities to leverage our technology adjacencies and drive market-leading innovation. We are very excited about this combination and the opportunities it creates for our customers and employees.”

The products and solutions of the combined company are deployed with over 2,000 customers across more than 100 countries, for broadcast and on-demand video services delivered via cable, satellite, telco, terrestrial, broadband and mobile networks. The company will have a combined video-focused global R&D organization of 450 engineers, a combined global sales and service organization of 330 people and a network of over 250 global sales channel partners.

Most of the Omneon executive management team is expected to join Harmonic at closing, including Lawrence Kaplan, a founder of Omneon, and Vasudevan.

The deal is subject to regulatory and other approvals.

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