SeaChange has completed the sale of its ownership stake in Casa Systems for gross proceeds of $34.1 million. SeaChange expects to generate net after-tax proceeds of $30 million on its investment of $8.9 million in Casa Systems. SeaChange also expects to record a pre-tax gain of $25.2 million in its fiscal first quarter related to the completion of this transaction.
SeaChange initially 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. SeaChange’s sale of its equity interest in Casa was executed as a stock repurchase by Casa.
Commenting on the sale, Bill Styslinger, SeaChange CEO and chairman, said in a statement, “We invested in Casa five years ago to help accelerate the development of cost-effective, marketable solutions that enable IP streaming over cable. 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.”
Styslinger continued, “The sale of SeaChange’s stake in Casa represents one of several strategic actions that the company is taking to improve its liquidity position and deepen its focus on software. SeaChange and Casa will remain close technology and business partners after the transaction and intend to continue collaborating on future projects.”