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 a premium of 46% over the market value, and 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.
For the first nine months of 2008, Scopus, which is headquartered in Rosh Ha'ayin, reported revenues of $55.4 million, an increase of 35% over the comparable period of 2007. Approximately 79% of these revenues were outside the US, with no single customer representing more than 10% of total revenues. Scopus has about 300 employees worldwide.
Harmonic's president & CEO Patrick Harshman said, "This acquisition extends Harmonic's diversification strategy, providing us 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. 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 US company will pay a 46% premium on the market value of Scopus, which is headquartered in Rosh Ha'ayin.
Harmonic Inc. (Nasdaq: HLIT) today announced the signing of an agreement to acquire Scopus Video Networks Ltd. (Nasdaq:SCOP) a global provider of digital video networking solutions, for $86 million. 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.