SUNNYVALE, Calif. -- As expected, C-Cube Microsystems has divested its semiconductor business as part of a pending acquisition by Harmonic Inc.
The spinoff, which will retain the moniker C-Cube Microsystems, will begin trading on the Nasdaq exchange under the stock symbol CUBED.
The creation of the new company is the final step required to complete the merger of C-Cube's MPEG encoder subsidiary, DiviCom Inc., with Harmonic, which sells video, voice, and data systems for cable, satellite, telecommunications, and wireless broadcasters. The deal was first disclosed last fall (see Oct. 28, 1999 story).
Umesh Padval, a 16-year semiconductor industry veteran who has been president of C-Cube Semiconductor since 1998, will become CEO of the new company and was named a director.
"The spinoff creates the world's leading pure-play semiconductor company in an extremely vibrant growth market for entertainment and information: digital video," Padval said. "We are excited about our growth over the past year as well as the growth potential of our expansion platforms DVD, set-top box and codec."
C-Cube also elected a board of directors which includes chairman Alex Balkanski; T.J. Rodgers, president and CEO of Cypress Semiconductor; Greg Reyes, chairman of Sync Research; and Baryn Futa, chief executive of MPEG LA. The company's stock will trade on the Nasdaq market under the symbol CUBED for approximately 20 trading days, but then will revert to its original CUBE symbol.
The spinoff carries a corporate tax payable by the new semiconductor company that will be determined based on the trading value of the company as of today. Based on Tuesday's "over-the-counter" market closing price of $24.31, the company would need to seek approximately $200 million in debt or equity financing to satisfy the obligation and other cash needs, C-Cube said.