Harmonic Acquires Rhozet

SUNNYVALE, Calif. -- Harmonic Inc. (NASDAQ: HLIT), a leading provider of broadcast and on-demand video delivery solutions to service providers around the world, today announced that it has entered into a definitive agreement to acquire Rhozet Corporation, a privately-held company based in Santa Clara, California. Rhozet offers software-based universal transcoding solutions that facilitate the creation of multi-format video for Internet, mobile and broadcast applications. The addition of Rhozet's software transcoding technology is expected to enable Harmonic's existing broadcast, cable, satellite, and telco customers to seamlessly create and deliver high quality Internet and mobile video programming. It is also expected to expand Harmonic's presence into the online video service provisioning market, where Rhozet's transcoding solutions are today in use by leading Web video content providers including Amazon.com, MSN and Yahoo!.

The $15.5 million dollar purchase price is comprised of cash and the value of approximately 1.1 million shares of Harmonic stock, as set forth in the definitive agreement. The acquisition is subject to customary closing conditions and is anticipated to close by the end of July 2007. Excluding charges for the amortization of intangibles, the transaction is expected to be neutral to Harmonic’s earnings per share for the second half of 2007.

"Viewers are increasingly turning to the Internet and mobile devices to watch an ever-expanding range of video content," said Patrick Harshman, President and CEO of Harmonic Inc. "Today's video programming includes everything from television shows and movies created for traditional broadcast and on-demand distribution, to webisodes and user-generated content specifically developed for online and mobile distribution. Rhozet's software transcoding technology is a natural extension to Harmonic's market-leading IP-enabled compression and on-demand solutions, and we believe that our combined solutions will make it possible for service providers to deliver superior quality video to virtually any device."

Harmonic Inc. (Nasdaq: HLIT)