Financial website The Business Insider published an article today called “Check out these 12 Juicy Buyout Candidates.”
One of the companies on the list is broadcast industry leader Dolby Labs.
Here’s a link to the Dolby piece, which shows the Business Insider’s rationale. For convenience, I have also pasted the text below:
“Dolby has been blowing our minds since 1965 and is one of the best known brands for sound technology.
While the economic downturn may have stagnated the company’s earnings growth, this brand isn’t going anywhere because it is:
A) Extremely well established as a leader.
B) Essentially debt free.
C) Sitting on half a billion dollars of cash.
D) Highly cash-generative and profitable with near-50% operating margins.
These days, when growing a new line of business is harder than ever, Dolby presents an interesting alternative for an electronics company looking to put money to work.
Thing is, would Ray Dolby ever sell his controlling stake? Maybe for the right price.”
There’s no doubt that Dolby is a successful company with a great business model. My view is that Dolby is an established leader with a great passion for their business and for success. While I don’t have any inside knowledge about what the company is planning, I do know that they have established a team of very smart people who know the professional audio and video space better than most.
Dolby is one of those companies about which video people often say “someone has to be the Dolby of video.” My view is that with their industry knowledge, brand, brainpower and of course cash, it wouldn’t surprise me if it was Dolby who emerges as “the Dolby of video.”