Harmonic to buy Thomson Video Networks

Harmonic CEO, Patrick Harshman

Video delivery firm Harmonic has signed a binding offer to acquire compression specialist Thomson Video Networks.

Under the terms of the offer, Harmonic would 100% of Thomson for roughly US$75 million in cash plus up to US$15 million in post-closing adjustments.

France-headquartered Thomson said that the proposed deal is consistent with its strategy to accelerate development by giving the company “greater global scale and resources”.

Harmonic CEO Patrick Harshman said that the combined company would “set the bar for video innovation globally.”

Thomson’s shareholders have granted Harmonic with exclusivity while it secures financing for the deal.

Both companies said they expect the deal to close in the first quarter of 2016, subject to receipt of regulatory approvals and other customary closing conditions.

Separately, Harmonic announced yesterday its intention to offer a US$125 million convertible note offering, with plans to use US$70 million of the net proceeds to pay a portion of the costs associated with the acquisition of Thomson.

Commenting on the planned takeover, Harshman said: “The combined product portfolios, R&D teams and global sales and service personnel would allow us to accelerate innovation for our customers while leveraging greater scale to drive operational efficiencies.”

Harmonic said that Thomson’s regional strength in Asia Pacific, Europe, the Middle East and Africa, and Latin America would enhance its global footprint and claimed there is less than 50% customer overlap between the companies.

The combined business would have a video-focused global R&D organisation of more than 600 engineers, a global service organisation of more than 300 professionals and a network of over 300 channel partners, according to Harmonic.