Broadcast Vendor M&A: Telestream Acquired by Genstar Capital

Posted by Joe Zaller
Jan 07 2015

Telestream_Logo (new in 2014)

Transcoding and workflow vendor Telestream announced that it has entered into a definitive agreement to be acquired by Genstar Capital, a San Francisco-based private equity firm that manages funds with total capital commitments of over $3 billion and targets investments focused on selected sectors within the financial services, software, industrial technology, and healthcare industries.

The seller was Thoma Bravo, the private equity firm that purchased Telestream in 2011 for an undisclosed amount.

Terms were not disclosed, but Telestream said that “the transaction recognizes the company’s significant growth and positions it well for the next phase of expansion.”

The deal comes just four months after Telestream issued a statement saying that its transcoding and workflow revenue increased by 40 percent in 2013 versus 2012, and had achieved profitable growth for the last 14 years. At that time, company CEO Dan Castles attributed the company’s impressive track-record of growth to both innovation and management stability.

Telestream will continue to operate as an independent entity, and its existing management team will continue with the company in their current roles.

Thoma Bravo said in a statement that since it bought the company, Telestream saw “incredible growth on several fronts,” thanks to new product launches, strategic M&A, and expanding its executive and sales team to drive further growth. “Thoma Bravo worked in partnership with management over our three year ownership period to invest in the business, make acquisitions and accelerate the company’s growth,” said Holden Spaht, a managing partner at Thoma Bravo. “The company today is a clear leader in the digital video space with the deepest set of products and services in the market.”

Castles issued an upbeat statement about the deal, and telegraphed he believes that under Genstar, Telestream might continue to use strategic M&A and become an industry consolidator.

“Genstar’s mid-market focus and deep expertise in the software industry will enable Telestream to further accelerate our growth,” said Castles. “Over the past several years, Telestream has experienced its most significant growth. We look forward to our new partnership with Genstar as we increase our investment in existing products, accelerate our reach into new customer verticals and fuel our next phase of development through additional M&A activity. Our product portfolio and business models are well suited for the Genstar environment.”

“Genstar has been following Telestream closely and this acquisition is consistent with our strategy of investing in vertical market software companies,” said Eli Weiss, a Managing Director of Genstar. Telestream is a leader in its market and has posted profitable growth since its founding. As even more content is generated and viewed on more devices, we believe the company will continue its demonstrated growth trajectory, and we will support Telestream’s experienced and successful management team to expand organic growth via new product releases and pursue add-on acquisitions.”

The deal is expected to close in mid-January 2015.

 

Genstar’s acquisition of Telestream is the latest in a series of deals related to online video and transcoding.

As broadcasters and media companies scramble to deploy multi-screen services, transcoding is seen by many as a key technology.  As a result, transcoding has also attracted its fair share of financing and M&A activity.  Here’s a quick run-down of some of the recent transcoding deals and related-financial news:

 

 

 

  • In April 2014, Imagine Communications acquired Digital Rapids for an undisclosed amount

 

  • In April 2014, Dalet acquired Amberfin for an undisclosed amount

 

  • In January 2013, Amazon unveiled its “Amazon Elastic Transcoder.” Based on the company’s Amazon Web Services (AWS) cloud computing platform, the Elastic Transcoder the service provides “a highly scalable, easy to use and a cost-effective way for developers and businesses to transcode video files from their source format into versions that will playback on devices like smartphones, tablets and PCs.”

 

  • In August 2012 Brightcove bought Zencoder, a 2-year old start-up with $2m in revenue for $30m, and subsequently launched a cloud based transcoding service at IBC 2012

 

 

 

 

 

 

 

 

 

 

  • RGB Networks bought transcoding vendor Ripcode in 2010

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Related Content:

Telestream Says Transcoding and Workflow Revenue Increased by 40 Percent Last Year

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Elemental Technologies Says Revenue Increased by 50 Percent in 2013

Elemental Technologies Says Revenue Doubled in 2012 to $21 Million as Transcoding Technology Continues to Grow

Elemental Closes $13 Million Funding Round, Latest in Series of Transcoding Deals

Harmonic Moves Transcoding Technology to the Cloud, Launches AWS-Based Service

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More Broadcast Vendor M&A: Brightcove Buys Zencoder for $30 Million in Latest Video Transcoding Deal

More Broadcast vendor M&A: Wohler Buys RadiantGrid, Latest in Series of Transcoding Deals

Envivio Files for $85 Million Goldman Sachs Led IPO

Envivio Closes $16.5 Million Fundraising Round

More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

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