Vecima May Seek a Sale

Canadian cable gear vendor Vecima Networks Inc. (Toronto: VCM) is exploring a range of "strategic alternatives" that could result in new partnerships or a sale of assets. (See Vecima Explores Its Options.)

Vecima, which has retained Stifel, Nicolaus & Co. Inc. to head up the vetting, said it's pursuing that angle because it doesn't believe its share price accurately reflects the value of it business. Vecima shares closed Tuesday at C$3.61 (US$3.63), off a 52-week high of C$4.10 (US$4.13).

Vecima's already been cutting back and shedding some non-core assets. It's brought in about $10.5 million from recent sales of some real estate and spectrum licenses, and it's chopped its head count by about 23 percent over the last year or so.

On the cable end, Vecima specializes in edge QAMs and converter equipment tailored to help cable operators deliver digital video services to apartments and hospitality venues without having to rely on individual set-top boxes. Among its newer products is Concierge, an IP-to-QAM device designed to help cable and satellite TV operators deliver services to hotels, resorts and hospitals. Some of Vecima's gear is powered by chipsets from BroadLogic Network Technologies Inc. , a startup that counts Comcast Interactive Capital among its backers.

Vecima also owns YourLink, a small wireless broadband service provider with about 19,000 subscribers.

Vecima sales have been lumpy of late thanks to delays involving some of its larger MSO customers, but its third quarter was relatively solid, with net income of C$6.2 million (US$6.24 million) on revenues of C$25.8 million (US$26 million), up 52 percent versus the year-ago period.

Why this matters
Vecima's decision to explore its options could spark interest from other vendors that are seeking new growth opportunities as cable operators chase down ways to serve apartments and hospitality venues without having to start from scratch. Cisco Systems Inc. (Nasdaq: CSCO), by the way, is among Vecima's longtime technology partners.

But Vecima's wireless ISP could be the first asset to hit the block. Speaking on Vecima's third-quarter call in mid-May, President and CEO Surinder Kumar said YourLink's business is growing, but that he would be willing to part with it "if it's a reasonable offer."

For more

• Vecima Networks Closes $4M Land Sale
• Vecima Ready to Ride With Comcast's 'Cavalry'?
• MSO Order Delays Hit Vecima
• Vecima Box Lets MDU Residents Keep Old TVs

— Jeff Baumgartner, Site Editor, Light Reading Cable