Harmonic Acquires Internet Video Firm

By Glen Dickson -- Broadcasting & Cable, 7/26/2007 6:14:00 PM

Compression and transmission vendor Harmonic is acquiring Rhozet Corporation, a supplier of software-based transcoding solutions aimed at creating multi-format video for Internet, mobile and broadcast use, for $15.5 million in cash and stock.

The deal for privately-held Rhozet, which has 15 employees and is based in Santa Clara, Calif., is expected to close by the end of the month. 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.

The Rhozet product line includes Carbon Coder, a stand-alone software transcoding application, and Carbon Server, an enterprise-level distributed transcoding management application. Harmonic says the deal will help its broadcast and cable customers create Internet and mobile video and expand Harmonic's presence into the online video service provisioning market, where Rhozet's transcoding solutions are used by Web video content providers including Amazon.com, MSN and Yahoo!.

"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., in a statement. "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."