Harris is not just a transmission company any more. The Mason, OH-based company has entered into a definitive agreement to acquire all of the shares of Leitch Technology in a deal valued at approximately $450 million in stock and cash. Harris expects the transaction to be completed in November, after a shareholder meeting in October.
The acquisition of Leitch, following Harris’ acquisition of Encoda Systems in November 2004 (for $340 million), establishes Harris as a major supplier of broadcast production and distribution equipment. Harris joins the ranks of companies such as Avid Technology with its acquisition of Pinnacle Systems, and Thomson, owner of Grass Valley.
Although Leitch has struggled to stay profitable in recent years, Harris said it is confident in the company’s new technology (80 percent of Leitch’s revenue came from products introduced since 2003) and current management team, led by current Leitch president and chief executive officer Tim Thorsteinson.
Jeremy Wensinger, president of the Harris Broadcast Communications division, said Harris is looking to offer complete workflow systems, from production to distribution, including content management and conditional access. It’s Harris’ desire to put together more capability for its customers and thus win more business. The Leitch product portfolio, including its Nexio servers, Velocity HD editing systems and wide array of signal conversion modules, will be managed under Wensinger, with Thorsteinson and his management team continuing in their roles.
Wensinger said product branding would remain in place until Harris completes the final integration of the two substantial product lines. The products themselves appear to complement each other well, with little redundancy. No layoffs are planned, as Leitch will now operate as a separate business unit within the Broadcast Communications division, although the various locations of Leitch will be under review going forward.
Wensinger also said that Harris has no intention to compete with its various system integration partners. This deal is about offering them more choices under the Harris banner. Likewise, many feel that with Harris’ software division (from its acquisition of Louth Automation), customers could get locked into a Harris user interface if they want to buy a Leitch server. Wensinger said they would continue to offer customers the choice to mix and match any brand of products they feel most comfortable with. Harris will add new software products to complement the Leitch system offerings in the future.
With the acquisition, Howard L. Lance, chairman, president and chief executive officer of Harris, said the company would now control 20 percent of the global broadcast/video production business, allowing them to go from serving a $500 million market to more than $2.4 billion. Leitch currently owns about 19 percent of the total U.S. production market, according to Harris. With the acquisition, Harris goes from a $450 million company to upwards of $600 million in revenue.