Harris Corporation announced to today that Leitch Technology Corporation had agreed to be purchased by Harris for C$14.00 a share in cash in a deal worth approximately US$450 million. Harris expects it will take until 2007 before the takeover has any positive effect on profit.
Like the purchase of Pinnacle by Avid, this takeover is about better serving the growing Digital Broadcast market. With many stations still to completely convert to digital, there’s a significant amount of growth potential remaining.
Like the purchase of Pinnacle, the merger leaves a non-linear application with an uncertain future. The Velocity line (VelocityHD, VelocityQ and VelocityX) while extremely powerful has not reached critical mass in sales. It will either flourish as the NLE component of a turnkey fit-out, or diminish as the company focuses on serving the television and radio broadcast systems.
The acquisition is to be completed by way of a statutory plan of arrangement and is subject to approval by Leitch shareholders, customary regulatory and court approvals, and other closing conditions. The transaction is expected to close in approximately 60 days.