Harris Corporation to Acquire Encoda Systems, A Global Leader in Broadcast Media Software


Melbourne, FL — Harris Corporation (NYSE: HRS)

has signed a definitive agreement to acquire Encoda Systems Holdings,

Inc., a leading global supplier of software and service solutions for

the broadcast media industry, including television, radio, cable,

satellite, and advertising agency customers around the world. Encoda’s

end-to-end workflow solutions include traffic and billing and

program-scheduling systems that are broadcast industry standards, and

their automation and media asset management solutions are very

complementary to Harris’ existing automation business.

Encoda Systems is a privately held company, owned by Thomas H. Lee

Partners, Blackstone Capital Partners, Evercore Capital Partners, and

others, that resulted from a combination of Enterprise Software,

Columbine JDS Systems, and Drake Automation. Today, the company has

approximately 700 employees with operations in the U.S., Canada, the UK,

and Australia. It serves more than 600 customers in 34 countries.

Encoda revenue for the 12 months ended June 30, 2004, was $124 million.

Harris will acquire Encoda Systems for approximately $340 million in

cash, subject to post-closing adjustments, customary closing conditions,

and regulatory approvals. The transaction is expected to close in early

November, and the acquisition is expected to be immediately accretive

to Harris earnings in fiscal year 2005 at approximately $0.12 per

diluted share. This excludes the write-off of in-process R&D and

one-time integration costs, which cannot be determined at this time

without unreasonable efforts.

“Encoda Systems is an outstanding strategic fit with Harris’

industry-leading Broadcast Communications business,” said Howard L.

Lance, chairman, president and chief executive officer of Harris

Corporation. “Encoda’s enterprise software solutions will significantly

expand Harris’ existing product offering to the global broadcast media

market. Encoda will also give Harris market reach beyond our existing

customer base into new cable and satellite markets.

“As digital content continues to move center stage in the media

industry, Harris will be leading with solutions for our customers that

automate workflow, improve efficiency, and reduce costs,” Lance

continued. “With this acquisition, Harris can now truly offer end-to-end

workflow solutions – software, hardware, and services – for customers

worldwide. Clearly, the combination of Harris and Encoda solutions will

create a powerful resource that can address all phases of the complex

transition of technology to modernize and streamline operations.”

Jeremy Wensinger, president of Harris’ Broadcast Communications

Division commented, “The Harris-Encoda combination will position Harris

as a preeminent supplier of open, integrated, enterprise-wide workflow

systems for any operation that creates, manages, and distributes rich

media. Harris will continue to offer and support current Harris and

Encoda product lines and provide our customers the best solution at

every link of the content chain. When customers choose Harris and

Encoda, they will be investing in platforms that will take their

businesses seamlessly into the future.”

“The Harris-Encoda combination is a solid partnership between two

leaders in the broadcast media industry,” said Don Doctor, chairman of

Encoda Systems. “It is good news for our customers and good news for our

employees. Harris has made a long-term commitment to the broadcast

media industry and has the size and resources to insure continuing

investments in technology.”

“Encoda Systems has exciting new technology under development,” Lance

concluded. “We will leverage the development resources available in

both businesses to move technology into the market more quickly. The

Encoda team also has a great depth of understanding and vision for the

needs of broadcast media clients. Our combined scale will help turn this

vision into a reality by leveraging the technology capabilities of all

our commercial and government divisions.”

Harris will host a conference call today at 5:00 p.m., Eastern Time,

to discuss the above items. Interested individuals are invited to listen

to the call by using a dial-in number: (913) 981-5519, access code:

982853. The conference call also will be broadcast live via the

Internet. The live webcast, presentation materials, and a replay will be

available at http://www.harris.com.

Harris Corporation is an international communications technology

company focused on providing assured communications™ products, systems

and services for government and commercial customers. The company’s

operating divisions serve markets for government communications,

tactical radio, broadcast, and microwave systems. Harris provides

systems and service to customers in more than 150 countries. Additional

information about Harris Corporation is available at www.harris.com.