Light Reading

Harmonic Sells Cable Access Unit for $46M

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
2/19/2013
50%
50%

Harmonic Inc. is selling off its cable access business to Aurora Networks Inc. for US$46 million, a move that will help Harmonic focus on higher-margin products, including video processing gear, edge QAMs and its budding Converged Cable Access Platform (CCAP). The product line Harmonic is selling off primarily involves outside plant equipment, including optical transmitters, amplifiers, receivers and nodes. Harmonic said cable access was its lowest gross margin product line (30 percent) and generated $52.9 million in net revenues for 2012. Harmonic's board has approved a $35 million share repurchase program that is contingent on the close of the deal, which is expected in the current quarter. It was not immediately known how many Harmonic employees will be joining Aurora. Why this matters
For Harmonic, the sale will let it sharpen its focus on product areas where it believes it has the most sizeable opportunities. During its fourth-quarter earnings call last month, CEO Patrick Harshman identified two key areas for growth: UltraHD encoding and CCAP, a next-generation cable access platform that will combine the edge QAM and cable modem termination system (CMTS) functions and prepare MSOs for an all-IP service transition. Harmonic says its first-generation CCAP product is in tests with at least five Tier 1 customers, with sales expected to start in the second half of 2013. For privately held Aurora, meanwhile, the deal should complement its own product line, and continue a recent string of acquisitions that has helped the company fill in gaps in its broadband access portfolio and expand its stable of customers. (See Aurora Buys Piece of Enablence.) For more



— Jeff Baumgartner, Site Editor, Light Reading Cable



(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
2/20/2013 | 1:47:22 PM
re: Harmonic Sells Cable Access Unit for $46M
Good point. That would certainly explain some of Harmonic's reasoning beyond the product synergy (or lack thereof) that Harshman got into during the call. JB
jtombes
50%
50%
jtombes,
User Rank: Light Beer
2/19/2013 | 10:34:17 PM
re: Harmonic Sells Cable Access Unit for $46M
Guessing this has been in the works for a while, but it looks as if HLIT's sale of cable access and the buy-back answers some of the concerns raised by large shareholder Voce Capital. Stock buy-back in particular.
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
2/19/2013 | 3:42:39 PM
re: Harmonic Sells Cable Access Unit for $46M
Harmonic President & CEO Patrick Harshman offered some additional details on the conf. call this morning.-á HLIT's access business has about 70 employees.-á

As part of the deal Harmonic has agreed to offer "transition services" to Aurora for up to five months. "You would expect the headcount to be in transition over that period of time," Harshman said. -áHarshman also said HLIT put the unit up for sale about 6 months ago and had multiple suitors interested.-á-á-áWithout the access biz, HLIT expects gross margins to rise 2% to 3%. Cable will-áremain its largest-ámarket. JB
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (8) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones