Harmonic has joined a growing group of vendors to ink warrant agreements with Comcast that gives the MSO an opportunity to buy shares in those suppliers based on product sales and deployment milestones.
Per this Harmonic filing with the SEC, the warrant agreement, announced Tuesday (Sept. 27), gives Comcast the opportunity to acquire up to 7,816,162 shares of Harmonic common stock for a per share exercise price of $4.76, a figure based on the weighted average trading price of Harmonic’s common stock for the 10 trading days prior to the issue date. Based on those numbers, that’s a value of roughly $37.2 million.
Harmonic shares closed Tuesday up 6 cents (1.30%), to $4.66 each.
“This agreement is a significant validation of our new product investment strategy,” Patrick Harshman, Harmonic’s president and CEO, said in a statement. “We are well positioned to further strengthen our partnership with Comcast, drive new growth and create value for our stockholders.”
Harmonic will offer more detail on the warrants agreement today on a conference call scheduled for 9 a.m. ET.
Harmonic did note in the agreement press release that the warrants agreement is based on specific sales to Comcast and other “deployment milestones” involving the vendor’s just-announced “CableOS” platform and other Harmonic products.
CableOS is a virtualized form of the Converged Cable Access Platform that aims to help cable operators scale up capacity while keeping power and space-requirements in check alongside a strategy to push more electronics toward the edge of the network. Nokia and Casa Systems also introduced virtual CCAP products this week.
During a Tuesday panel session at the SCTE/ISBE Cable-Tec Expo show in Philadelphia, top engineering execs at Liberty Global, Charter Communications and Shaw Communications shined some light on the economic and capacity drivers that are causing them to consider a shift toward software-based access network platforms and distributed architectures that run on cheaper commercial off-the-shelf (COTS) hardware and away from centralized, purpose-built hardware.
Comcast has recently signed similar warrants deals with Arris (focused on products in the supplier's Network and Cloud segment), and with Universal Electronics, a key supplier for Comcast’s voice remote for the X1 platform.