SeaChange expects to net $30M for stake in Casa Systems
SeaChange International has parted with its ownership stake in privately held Casa Systems and expects to net, after tax proceeds, $30 million on its investment of $8.9 million five years ago.
VOD vendor SeaChange said it expected to record a pre-tax gain of $25.2 million in its fiscal first quarter related to the completion of the transaction. SeaChange’s $34.1 million sale of its equity interest in Casa was executed as a stock repurchase by Casa.
SeaChange first purchased an equity stake in Casa Systems in July 2005 for $8.2 million, paid in cash and the cancellation of promissory notes previously issued to Casa in 2005. In June 2009, SeaChange invested an additional $654,000 in Casa Systems.
“We invested in Casa five years ago to help accelerate the development of cost-effective, marketable solutions that enable IP streaming over cable,” SeaChange CEO and Chairman Bill Styslinger said. “IP streaming is essential for SeaChange to deliver advanced IP-based television software applications. Now that IPTV is a reality, it is the right time for us to sell our shares of Casa so we can allocate all of our resources to help grow our core business.
“It has been a pleasure to work with Casa and to see our mutual vision of DOCSIS 3.0 and IP streaming come to fruition. We look forward to continuing to work together in the future. SeaChange and Casa will remain close technology and business partners after the transaction and intend to continue collaborating on future projects.
Styslinger said the sale of SeaChange’s stake in Casa would help the company improve its liquidity position as it focuses more on software-driven products. In its fourth-quarter earnings call  in March, SeaChange laid off some of its employees and announced it would focus more on software development, lowering its R&D expenses, growth readiness and over-the-top products.
Casa Systems, a privately held company based in Andover, Mass., was the first vendor to receive full “gold” certification from CableLabs for two of its DOCSIS 3.0 cable modem termination system .
Casa Systems has said cable operators worldwide, most notably UPC Broadband, have deployed its CMTS.
Blackstone Advisory Partners acted as the exclusive financial advisor to SeaChange in today’s transaction.