TORONTO – Harris Corporation is buying Leitch Technology Corporation for approximately $592 million Canadian.
Harris and Leitch have entered into an arrangement agreement whereby Harris would acquire all of the outstanding common shares of Leitch for a cash price of $14 per share. The 20-day volume weighted average price for Leitch shares on the Toronto Stock Exchange is $9.72.
Toronto-based Leitch has been manufacturing broadcasting equipment for more than 30 years. Harris Corporation, of Melbourne, Fla., is an international communications and information technology company.
“The combination of Leitch Technology with Harris will create a powerful force in the broadcast technology industry,” says Tim Thorsteinson, president and CEO, Leitch Technology Corporation. “This is an extremely positive opportunity for our employees, customers, and shareholders.”
Leitch’s board of directors is recommending that its shareholders vote in favour of the transaction at a shareholders’ meeting, expected to be held on or about Oct. 24. Subject to court approval, two-thirds of shareholders at the meeting must approve the deal.
“This acquisition further positions Harris to lead the broadcast industry’s transition to high-definition digital services,” says Howard L. Lance, chairman, president, and chief executive officer of Harris. “Leitch has a veteran management team with strong domain knowledge and has launched important new products to meet the changing needs of the digital marketplace. Our combined products and systems serve every segment of the increasingly complex supply chain that brings digital audio, video, and data content to consumers. This acquisition clearly establishes Harris as the company that broadcasters turn to as they upgrade their equipment and software systems to operate in a digital environment.”
Meanwhile, Leitch also announced today its first quarter results for the three months ended July 31, 2005. Revenues were $53.4 million, down 3% from the same period last year, due mainly to currency fluctuations, primarily the strengthening Canadian dollar over the U.S. dollar. Earnings before amortization, investment income, equity interests, income taxes, and other charges for the quarter were $3.5 million, or $0.09 per share, compared with $2.3 million, or $0.07 per share during the same period last year. Gross margin for the quarter was $28.8 million, or 54% of revenue, compared with $26.0 million or 47% of revenue, in the same period of fiscal 2005.
