SeaChange International has sold its stake in privately held Casa Systems, a cable-modem termination systems vendor, for $34.1 million.
SeaChange's sale of its equity interest in Casa was executed as a stock repurchase by Casa.
SeaChange said it expects to generate net after-tax proceeds of $30 million, after previously investing $8.9 million in Casa Systems. Additionally, SeaChange expects to record a pretax gain of $25.2 million in its fiscal first quarter related to the completion of this transaction.
SeaChange chairman and CEO Bill Styslinger said in a statement that the video-on-demand company was selling its stake in the CMTS company as part of "several strategic actions" to improve
its liquidity position and "deepen its focus on software." In March, SeaChange laid off between 3% and 4% of its workforce in what the company said was a shift toward a software-oriented product mix and an effort to cut R&D expenses.
"We invested in Casa five years ago to help accelerate the development of cost-effective, marketable solutions that enable IP streaming over cable. IP streaming is essential for SeaChange to deliver advanced IP-based television software applications," Styslinger said. "Now that IPTV is a reality, it is the right time for us to sell our shares of Casa so we can allocate all of our resources to help grow our core business."
SeaChange and Casa will remain "close technology and business partners after the transaction and intend to continue collaborating on future projects," Styslinger added.
Andover, Mass.-based Casa Systems sells DOCSIS 3.0 CMTSs and has the distinction of achieving CabeLabs' first DOCSIS 3.0 "gold" certification. Casa's CMTS has been deployed with cable operators worldwide, including UPC Broadband.
Blackstone Advisory Partners was the exclusive financial advisor to SeaChange for the transaction.
SeaChange initially purchased an equity stake in Casa Systems in July 2005 for $8.2 million, paid in cash and the cancellation of promissory notes previously issued to Casa in 2005. In June 2009, SeaChange invested an additional $654,000 in Casa Systems.