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Mergers & acquisitions

Hoping for Harmonic

As the Terayon Communication Systems Inc. sweepstakes contest seemingly draws to a close, two Wall Street analysts are actively rooting for underdog Harmonic Inc. (Nasdaq: HLIT) to edge out tech giants Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT) for the brass ring.

In a fresh report on the ever-fascinating auction for Terayon, ThinkEquity LLC analysts Anton Wahlman and Eric Kainer are pulling for Harmonic for the "health" of the digital video tech industry. They argue that cable operators and telco TV providers would "likely be ill-served to see yet another company" swallowed by either Moto or Cisco.

Noting that Harmonic has been a major reseller of Terayon digital video equipment, Wahlman and Kainer point out that Harmonic and Terayon "go back a long time." The analysts also note that the two companies' headquarters are located just a couple of miles away from each other.

But, even though Wahlman and Kainer are rooting for Harmonic, they don't think it'll actually win the bidding contest. Instead, they're betting on Motorola as the victor, calling it "the most motivated party" to buy Terayon. They also believe that a Terayon purchase best fits Moto's "extremely acquisition-prone recent past."

— Alan Breznick, Site Editor, Cable Digital News

Pancakes 12/5/2012 | 3:14:33 PM
re: Hoping for Harmonic
I don't agree with the analysts. Terayon's CherryPicker product is a massive revenue generating machine that hasn't been realized yet. I think CherryPicker is too big for Harmonic.

Motorola and Cisco would be able to use CherryPicker to achieve some amazing industry changing features, and would be able to squeeze out tons of money generating revenue streams from CherryPicker.

Specificaly the "Localization" feature. That is something that will shatter the industry. Just imagine when you see an ad on TV, being able to see the local store address for that advertiser. And/or deals related to that store. Amazing. You need a Cisco or Motorola to realize the full potential of Cherrypicker.

CherryPicker is the golden jewel of the cable industry.
Michael Harris 12/5/2012 | 3:14:32 PM
re: Hoping for Harmonic No doubt Moto or Cisco would drive stronger CherryPicker sales than Harmonic. Interestingly, Moto is a reseller of RGB's competing platform. Buying Terayon would undermine that relationship.
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