Harris Corporation to Acquire Encoda Systems, a Global Leader in Broadcast Media Software
October 06 2004 - 5:01PM
PR Newswire (US)
Harris Corporation to Acquire Encoda Systems, a Global Leader in
Broadcast Media Software MELBOURNE, Fla., Oct. 6
/PRNewswire-FirstCall/ -- Harris Corporation (NYSE:HRS) has signed
a definitive agreement to acquire Encoda Systems Holdings, Inc., a
leading global supplier of software and service solutions for the
broadcast media industry, including television, radio, cable,
satellite, and advertising agency customers around the world.
Encoda's end- to-end workflow solutions include traffic and billing
and program-scheduling systems that are broadcast industry
standards, and their automation and media asset management
solutions are very complementary to Harris' existing automation
business. Encoda Systems is a privately held company, owned by
Thomas H. Lee Partners, Blackstone Capital Partners, Evercore
Capital Partners, and others, that resulted from a combination of
Enterprise Software, Columbine JDS Systems, and Drake Automation.
Today, the company has approximately 700 employees with operations
in the U.S., Canada, the UK, and Australia. It serves more than 600
customers in 34 countries. Encoda revenue for the 12 months ended
June 30, 2004, was $124 million. Harris will acquire Encoda Systems
for approximately $340 million in cash, subject to post-closing
adjustments, customary closing conditions, and regulatory
approvals. The transaction is expected to close in early November,
and the acquisition is expected to be immediately accretive to
Harris earnings in fiscal year 2005 at approximately $0.12 per
diluted share. This excludes the write-off of in- process R&D
and one-time integration costs, which cannot be determined at this
time without unreasonable efforts. "Encoda Systems is an
outstanding strategic fit with Harris' industry- leading Broadcast
Communications business," said Howard L. Lance, chairman, president
and chief executive officer of Harris Corporation. "Encoda's
enterprise software solutions will significantly expand Harris'
existing product offering to the global broadcast media market.
Encoda will also give Harris market reach beyond our existing
customer base into new cable and satellite markets. "As digital
content continues to move center stage in the media industry,
Harris will be leading with solutions for our customers that
automate workflow, improve efficiency, and reduce costs," Lance
continued. "With this acquisition, Harris can now truly offer
end-to-end workflow solutions -- software, hardware, and services
-- for customers worldwide. Clearly, the combination of Harris and
Encoda solutions will create a powerful resource that can address
all phases of the complex transition of technology to modernize and
streamline operations." Jeremy Wensinger, president of Harris'
Broadcast Communications Division, commented, "The Harris-Encoda
combination will position Harris as a preeminent supplier of open,
integrated, enterprise-wide workflow systems for any operation that
creates, manages, and distributes rich media. Harris will continue
to offer and support current Harris and Encoda product lines and
provide our customers the best solution at every link of the
content chain. When customers choose Harris and Encoda, they will
be investing in platforms that will take their businesses
seamlessly into the future." "The Harris-Encoda combination is a
solid partnership between two leaders in the broadcast media
industry," said Don Doctor, chairman of Encoda Systems. "It is good
news for our customers and good news for our employees. Harris has
made a long-term commitment to the broadcast media industry and has
the size and resources to insure continuing investments in
technology." "Encoda Systems has exciting new technology under
development," Lance concluded. "We will leverage the development
resources available in both businesses to move technology into the
market more quickly. The Encoda team also has a great depth of
understanding and vision for the needs of broadcast media clients.
Our combined scale will help turn this vision into a reality by
leveraging the technology capabilities of all our commercial and
government divisions." Harris will host a conference call today at
5:00 p.m., Eastern Time, to discuss the above items. Interested
individuals are invited to listen to the call by using a dial-in
number: (913) 981-5519, access code: 982853. The conference call
also will be broadcast live via the Internet. The live webcast,
presentation materials, and a replay will be available at
http://www.harris.com/ . Harris Corporation is an international
communications technology company focused on providing assured
communications(TM) products, systems and services for government
and commercial customers. The company's operating divisions serve
markets for government communications, tactical radio, broadcast,
and microwave systems. Harris provides systems and service to
customers in more than 150 countries. Additional information about
Harris Corporation is available at http://www.harris.com/ .
Forward-Looking Statement Statements in this press release that are
not historical facts are forward-looking statements that reflect
management's current expectations, assumptions, and estimates of
future performance and economic conditions. Such statements are
made in reliance upon the safe harbor provisions of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements in this release
include but are not limited to the anticipated timing of the
closing of the Encoda acquisition and the impact of the acquisition
on our fiscal 2005 earnings. The Company cautions investors that
any forward-looking statements are subject to risks and
uncertainties that may cause actual results and future trends to
differ materially from those matters expressed in or implied by
such forward- looking statements. The Company's consolidated
results and the forward- looking statements could be affected by
many factors, including but not limited to: uncertain economic
conditions which make it difficult to estimate growth in our
markets and, as a result, future income and expenditures; the
telecommunications downturn, which has had and may continue to have
a negative effect on our telecom businesses; our dependence on the
U.S. Government for a significant portion of our revenues, as the
loss of this relationship or a shift in U.S. Government funding
could have adverse consequences on our future business; financial
and government and regulatory risks relating to international sales
and operations, including fluctuations in foreign currency exchange
rates and the effectiveness of our currency hedging program; the
fair values of our portfolio of passive investments, which values
are subject to significant price volatility or erosion; our ability
to continue to develop new products that achieve market acceptance;
the consequences of future geo- political events, which may affect
adversely the markets in which we operate, our ability to insure
against risks, our operations or our profitability; strategic
acquisitions and the risks and uncertainties related thereto,
including our ability to manage and integrate acquired businesses;
potential changes in U.S. Government or customer priorities due to
program reviews or revisions to strategic objectives, including
termination of or potential failure to fund U.S. Government
contracts; risks inherent with large long-term fixed price
contracts, particularly the ability to contain cost overruns; the
performance of critical subcontractors or suppliers; potential
claims that we are infringing the intellectual property rights of
third parties; the successful resolution of patent infringement
claims and the ultimate outcome of other contingencies, litigation
and legal matters; customer demand for financing and customer
credit risk; cost reductions, which may not yield the benefits we
expect and could have adverse effects on our future business; the
impact of competitive products and pricing; risks inherent in
developing new technologies; the ability to recruit and retain
qualified personnel; and general economic conditions in the markets
in which we operate. Further information relating to factors that
may impact the Company's results and forward-looking statements are
disclosed in the Company's filings with the SEC. Harris disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. For additional information, contact Harris
Corporation at . http://www.harris.com/DATASOURCE: Harris
Corporation CONTACT: Media, Tom Hausmanm, +1-321-727-9131, or ; or
investors, Pamela Padgett, +1-321-727-9383, or , both of Harris
Corporation Web site: http://www.harris.com/
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