February 19, 2013
Harris Corporation (NASDAQ: HLIT) announced that it has reached an agreement to sell its cable access business to Aurora Networks for $46 million in cash. The transaction is also subject to customary closing conditions and is expected to be completed in the first quarter of 2013. Additionally, as part of ongoing efforts to review its capital structure and provide value to all shareholders, the Harris Corporation Board of Directors has approved an increase to its current share repurchase program, which includes approximately $35 million in after-tax cash proceeds from this transaction.
"The sale of the cable access business sharpens our focus on our greatest growth opportunities," said Patrick Harshman (President and CEO). "With the lowest margin product line in cable access, this transaction, along with an increase in our authorized stock repurchase program, will allow us to continue driving economic growth in our core markets, expand our gross margins, and reduce our outstanding shares, positioning our business for long-term profitability." The strategic decision to divest the cable access business reflects Harle's commitment to the fields of video production and playback, video processing, and cable edge products, where it currently holds a leading market share.
Harris is not a market leader in the wired access product sector, and the synergy between wired access and the company's other high-growth product lines is limited. The wired access product portfolio includes optical transmitters, amplifiers, receivers, and nodes. Due to Harris's long-standing relationships with customers in the wired access business, Harris is very pleased to collaborate with Aurora Networks, given its scale, strategic focus, and commitment to customer service.