Edmond de Rothschild Investment Partners sells its stake in Thomson Video Networks to Harmonic Inc.

Mid Caps capital development - 3/1/2016

This transaction is the first disposal by WINCH Capital 3, a fund raised in September 2014.

Edmond de Rothschild Investment Partners today announces the acquisition of 100% of the capital in Thomson Video Networks, a company in the portfolio of the WINCH Capital 3 private equity fund, by Harmonic Inc. (NASDAQ: HLIT), the global market leader in video delivery systems, in a transaction that values Thomson Video Networks at between 75 and 90 million dollars.

Thomson Video Networks is one of the global leaders in video compression solutions. Specialising in headend technology, Thomson Video Networks offers compression and transcoding solutions to operators, video services suppliers and media content distributors, enabling them to deliver the best possible quality of video signal while optimising the bandwidth, regardless of the type of network used (satellite, terrestrial, IPTV (Internet Protocol Television), cable, OTT (Over-The-Top content)).

Thomson Video Networks, based in Cesson-Sévigné near Rennes, operates 16 sites worldwide through its 400 employees, and achieves total annual turnover of around 75 million euros, including some 90% of sales abroad.

51% of the group's capital is held by management, led by its chairman Christophe Delahousse, with 49% held by WINCH Capital 3. In November 2014, the WINCH Capital 3 FPCI (private equity fund) managed by Edmond de Rothschild Investment Partners and supported in its investment by CM-CIC Private Debt, took a stake in Thomson Video Networks as part of a transaction enabling management to take a majority capital interest in the group. Three years after the spin-off from Technicolor, this transaction took place within the context of ambitious development plans led by management, consisting of enhancing the group's leading position in its historical markets (terrestrial TV and satellite TV) and establishing its position as a major player in new market segments (OTT and IPTV).

With total sales in 2015 of 377 million dollars, Harmonic Inc., based in San José, California, is the global market leader in video delivery infrastructure. The acquisition of 100% of the capital of Thomson Video Networks by Harmonic creates the undisputed global leader in the video compression sector, with some 40% of market share. The transaction will enable Thomson Video Networks to accelerate its growth plan in a sector where a critical mass in terms of R&D, sales personnel and customer support throughout the world represents a major commercial edge.

The transaction values Thomson Video Networks at 75 million dollars, in addition to an earnout clause of up to 15 million dollars. This first disposal by the WINCH Capital 3 fund represents a significant success less than one-and-a-half years after its launch.

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