Harmonic Agrees to Acquire Rhozet

"Harmonic 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.

The Rhozet product line includes Carbon Coder, a stand-alone software transcoding application, and Carbon Server, an enterprise-level distributed transcoding management application. This highly scalable solution is designed to allow users to start with a single system that can be expanded to a large transcoding server farm, and includes features such as load balancing and failover protection for maximum reliability.

Rhozet's solutions have been deployed by more than 100 customers including Amazon.com, Ascent Media, BT, CBS, Channel 10 Israel, Detroit Public Television, Entertainment Television, ESPN, MSN, MTV Networks, News Broadcasting Japan, ProSieiben.Sat1, Sony, Technicolor, Telekom Austria, The FeedRoom, thePlatform, The Weather Channel, TVAzteca, and Yahoo!."

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