Archive for the ‘Broadcast Vendor M&A’ Category

Vitec Group acquires Wooden Camera for Consideration Up to $35 million

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Sep 20 2016

The Vitec Group has acquired Wooden Camera, a provider of camera accessories including baseplates, cages, hand grips, matte boxes, monitor mounts, shoulder rigs, and zip boxes.  deal-logo

Wooden Camera is based in Dallas, Texas and privately owned by its management team, Ryan and Elizabeth Schorman.  Both will remain with business post-acquisition.  Wooden Camera will become part of Vitec’s Broadcast Division.

The press release announcing the acquisitions cites the opportunity to grow Wooden Camera through expanded distribution as part of Vitec’s global sales network.  Also noted in the announcement is the opportunity for Wooden Camera to benefit from Vitec’s manufacturing and product sourcing capabilities.

As part of the acquisition announcement The Vitec Group disclosed portions of Wooden Camera’s recent financial results along with the high-level deal terms.

Wooden Camera generated an unaudited adjusted EBITDA of £1.9 million ($2.5 million) for the 2015 calendar year.   Management indicated Wooden Camera has grown in the year-to-date period of 2016.

The upfront cash consideration is £15.3 million ($20.0 million), which is subject to post-closing adjustments.  The deal also includes a potential earn out representing an additional £11.5 million ($15.0 million) of consideration.  The earn out payments are based on Wooden Camera achieving “demanding” EBITDA targets for the financial periods thru the close of the 2018 calendar year.  The 2018 EBITDA target is $7.3 million (this represents an almost tripling of 2015 EBITDA).   Vitec will finance the transaction using its existing banking facility.

Using the 2015 EBITDA disclosure, the upfront consideration values Wooden Camera at 8.0x 2015 EBITDA (not including the earn-out).  The total consideration has the potential to value Wooden Camera at 17.5x 2015 EBITDA.  Since more than 40 percent of the total potential deal value is in the form of an aggressive earn-out, it is more appropriate to focus on the implied valuation of the upfront consideration.  The multiple of 2016 EBITDA – though unavailable – is likely less since Wooden Camera has continued to grow.

To put these figures in context, The Vitec Group currently trades in the public markets at a valuation of 7.8x trailing twelve month EBITDA and 1.0x trailing twelve months of revenue (on an enterprise value basis).

The press release states “The Board expects the acquisition to be immediately earnings enhancing.”  This statement is then clarified in the notes to the press release as follows, “This statement should not be taken to mean that earnings per share of The Vitec Group plc will necessarily exceed or be lower than historic earnings per share of The Vitec Group plc and no forecast is intended or implied. This refers to earnings before charges associated with acquisition of businesses.”

It is interesting to reflect on the impact of a weaker GBP currency on the transaction pricing.  The “Brexit” referendum of June 23, 2016 precipitated a decline of the GBP versus the US dollar.  A weaker GBP should – on balance – benefit Vitec’s revenue results.  However, it will make expenditures in other currencies more expensive, including the acquisition of a US-based business as is the case with Wooden Camera.  On June 1, 2016 the exchange rate was 1.44 USD / GBP.  The figures in The Vitec Group press release were based on an exchange rate of 1.31 USD / GBP or 9% lower.  Meaning, the acquisition in GBP terms was 9% more expensive because of the recent disruption in the GBP currency.

The Vitec Group often structures its acquisitions with a substantial portion of contingent consideration.  This was also the case in the recent acquisitions of Offhollywood, SmallHD, and Teradek.

Commenting on the acquisition Vitec’s Group Chief Executive Stephen Bird stated, “I am delighted to welcome the Wooden Camera team to Vitec. Wooden Camera’s products are the glue that binds all the building blocks together on a professional camera system.  This leading business complements Vitec’s strategy of providing premium branded broadcast products and services to our customers to capture and share exceptional images. The business has great prospects and we anticipate that it will generate a good return on our investment.”

 

 

Related Content:

Vitec Group Press Release on Wooden Camera Acquisition

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Media Tech Vendor M&A: Blackmagic Design Acquires Ultimatte

broadcast technology market research, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 09 2016

Blackmagic Design today announced it has acquired blue and green screen Ultimatte.

Terms of the deal were not disclosed.

Ultimatte was founded in 1976 and has won an Emmy for their realtime compositing technology, a Lifetime Achievement Award from the Academy of Motion Picture Arts and Sciences, as well as an Oscar.

Ultimatte is known worldwide for delivering broadcast quality compositing results that make virtual sets indistinguishable from real sets. Ultimatte creates realtime blue and green screen removal hardware that is used in broadcast studios around the world to seamlessly composite reporters, talk show hosts and more into virtual sets. Almost every newscaster and weather reporter stands in front of a green or blue screen while delivering the news and weather. For the past 40 years, Ultimatte has been the industry standard hardware or software responsible for keying these people in front of weather maps, stock charts, and other info graphics. In fact, many of these newscasters are using Ultimatte to place them into completely virtual sets.
Ultimatte uses advanced 4:4:4:4 image processing and provides enhanced matte controls that lets customers accurately separate the subject from the background. Customers also get matte correction features, indirect and direct lighting features, spill suppression tools, edge artifact controls and more, all in realtime.
“Ultimatte’s realtime blue and green screen compositing solutions have been the standard for 40 years,” said Grant Petty, Blackmagic Design CEO. “Ultimatte has been used by virtually every major broadcast network in the world. We are thrilled to bring Ultimatte and Blackmagic Design together, and are excited about continuing to build innovative products for our customers!”

 

Media Tech Vendor M&A: Telestream Buys Vidcheck

Broadcast technology channel strategy, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 05 2016

telestream-logo-transparant

Telestream announced that it has acquired Vidcheck, a provider of automated quality control (QC) solutions for broadcast and media technology applications.

Vidcheck_Logo

The deal, which was funded by cash from operations, has been completed. Terms were not disclosed.

Vidcheck founder Tom Dove will remain with the enlarged company.

The Vidcheck deal is Telestream’s sixth acquisition.  Similar to its recent purchases of cloud encoding company Panda, and captioning specialist CPC, Telestream CEO Dan Castles described the Vidcheck deal as a “tuck-in,” rather than a transformation. Although Telestream’s Vantage workflow orchestration platform currently includes an option called Analysis, the company believes that it can drive greater value for its customers by offering Vidcheck’s automated file-based QC software as part of its overall offering.

“Vidcheck’s team and product portfolio line up very well with our area of expertise,” said Castles. “It is not just some great technology and products that we are acquiring but also a gifted, talented and passionate team that will reinforce our resources here at Telestream. We look forward to leveraging our combined know-how to offer our worldwide customer base an even more complete and exciting product portfolio.”

Telestream says it will also continue to integrate and interoperate with multiple QC vendors, as it already does today.

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

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Disney Acquires Equity Stake in BAMTech

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Aug 09 2016

Disney announced a $1 billion acquisition of a minority stake in BAMTech, the entity holding Major League Baseball’s streaming technology and content delivery business.  The spin-out of BAMTech from MLB Advanced Media (“MLBAM”) was announced in late 2015.  The Disney investment in BAMTech had been rumored for several months.

In its quarterly SEC filing, Disney disclosed it acquired an initial 15% equity position in BAMTech for $450 million.  Disney has committed to purchasing an additional 18% equity interest in BAMTech for $557 million in January 2017.  Those two investments value BAMTech at $3.05 billion.

Disney declined to provide any specifics on BAMTech’s operating profile, though did note there is “some very slight dilution from the acquisition.”  However, Disney’s management felt this was more than offset by the trajectory of BAM Tech’s business and the opportunities to combine with Disney’s content properties, most notably ESPN.

Based on the previous public statements by MLBAM’s CEO Bob Bowman, the  $3.05 billion valuation level implies a revenue multiple of 12.2x expected 2016 revenue for BAMTech (please note several estimates involved in that calculation).

As part of the investment, Disney also gains the right to acquire majority ownership “in the coming years.”  The NHL currently holds a 7% – 10% equity position in BAMTech based on the August 2015 partnership deal between the companies.

The announcement coincided with Disney’s fiscal third quarter results.  During Disney’s call with analysts, CEO and Chairman Bob Iger, added context on Disney’s diligence of BAMTech.

“I love the business model because I love the quality of what they’ve created, largely from a technology perspective.  You’re look at an industry-leading platform.  And we did a fair amount of due diligence on this, speaking with people who have been clients of their service.  And also, we did our own due diligence in the sense that we’ve been clients of competing services.  And we concluded that what they’ve got is really robust” said Mr. Iger.

Since Disney is already a customer of BAM Tech, one immediate question is why Disney thought it was necessary to buy BAM Tech as opposed to renting its services as a customer.  During an interview with CNBC, Bob Iger responded to the customer vs. owner question from CNBC host Julia Boorstin.

“First of all, we think it is a good investment. We love their business model.  We think that in today’s world having the ability to stream on a scale basis live sports and live programming is a competitive advantage and something that is necessary.  We love the user interface.  So, overall we look at is as an investment.  But as a partner, as a part owner, and ultimately as a majority owner, we feel it gives us an ability to jump start not only ESPN, but are other business as well, into a space that we think is not only very exciting but extremely important in a very dynamic media marketplace.  So much better to own than to rent” responded Mr. Iger.

 

Related Content:

Press Release: Disney Acquisition of Minority Stake in BAMTech

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Clear-Com Acquires Trilogy Communications

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Aug 08 2016

Intercom solution provider Clear-Com has acquired competitor Trilogy Communications.  The purchase price equates to a valuation of 0.9x annual revenue.  cc-trilogy

Clear-Com is a subsidiary of Poway, CA based HM Electronics (“HME”).  Trilogy is headquartered in Andover, Hampshire UK and had been owned by the Foresight Group, a UK based infrastructure and private equity investment manager.

In its 2015 annual report, Foresight had indicated Trilogy was pursuing strategic options including a possible sale.

Based on Foresight’s disclosure, the acquisition price for Trilogy is GBP 2.9 million.  According to its regulatory filings, Trilogy’s revenue for the trailing twelve months ending February 2016 was GBP 3.26 million.  Using these figures the transaction values Trilogy at a 0.9x multiple of annual revenue.  When HME purchased Clear-Com from the Vitec Group in 2010, the valuation was 0.4x annual sales.

Trilogy’s revenue declined (in GBP terms) 23% in the twelve months ending February 26, 2016.  This was preceded by revenue decreases in 2013 and 2012 (2014 showed slight growth).  In aggregate, annual sales decreased 62% between the fiscal year ending February 2012 and the most recent fiscal year ending February 2016.

Trilogy’s profitability was impacted by the decline in sales.  EBITDA loss was GBP 762,000 for the fiscal year ending February 2014 and GBP 509,000 for the fiscal year ending February 2015.

Foresight’s financial reports provide additional context on the declining performance of Trilogy.  The principal cause cited for the revenue declines since 2012 were delays in US Defense orders.  The broadcast division of Trilogy was cited as facing a difficult trading environment in each of 2014 and 2015.

In the press release announcing the acquisition, Mitzi Dominguez, CEO of Clear-Com stated, “Both companies have been serving the professional intercom business for decades and bring a wealth of industry knowledge to the marketplace. The efforts of our combined teams will deliver tremendous added value to customers all over the world and will create new business opportunities for both companies. We extend a warm welcome to all Trilogy employees and customers.”

Bob Boster, President of Clear-Com, added some context on the technology alignment of the businesses.   “Their specialized matrix solutions perfectly complement Clear-Com’s highly-programmable and scalable digital matrix portfolio, increasing each team’s capabilities to meet the ever-growing and vastly-diverse communication needs across the markets we serve.  Trilogy’s SPG solutions will also be well received by our broadcast customers globally” said Mr. Boster.

 

Related Content:

Press release: Clear-Com Acquisition of Trilogy Communications

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

DaySequerra Acquires Orban

Broadcast Vendor M&A | Posted by Josh Stinehour
Jul 11 2016

Audio solution provider DaySequerra announced it has reached an agreement to acquire Orban, a provider of audio processing solutions for broadcast transmission.  Financial terms were not disclosed.

The acquisition remains subject to approval by the shareholders of Orban’s parent company Circuit Research Labs, Inc, which formerly traded on the OTC/BB NASDAQ.  Circuit Research Labs ceased issuing SEC filings in late 2008.  At the time, it was a $14 million annual revenue business.

Orban is a long-standing brand in the broadcast industry.  The Company was originally founded in 1975 by Bob Orban.  It was acquired by AKG Acoustics in 1989, which in turn was subsequently purchased by Harman International in 1993.  Harman divested Orban to Circuit Research Labs in 2000.

In May 2010, the Brentlinger family, the principal owners of Circuit Research Labs, publicly announced their intention to seek to divest majority ownership of Orban.  By August 2010, the Brentlinger family changed course and decided to retain their investment position.

Orban is also a founding member of the Broadcast Industry Group (BIG), announced ahead of IBC 2014.  BIG consists of Orban, SCMS, Jampro, DaySequerra, BW Broadcast, Bird Technologies, and StreamGuys and is intended to “promote the consolidation of key manufacturers and service providers in the broadcast industry.”

“The synergistic opportunity that this acquisition represents is just fantastic – opportunities like this don’t happen very often. We look forward to working with Bob’s team and Orban Europe to develop and bring to market the next-generation of intelligent audio processing in the broadcast, consumer and automotive spaces,” said DaySequerra’s President, David Day.

Jay Brentlinger, President, CEO and Chairman of Circuit Research Labs added “We are really excited about DaySequerra’s acquisition of Orban and to work together with David and his team. With a significant array of technologies, these combined companies will be a formidable force in the marketplace.”

 

Related Content:

Press release: DaySequerra Acquires Orban

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

ChyronHego Acquires Click Effects; 5th Acquisition Since Going-Private

Broadcast Vendor M&A | Posted by Josh Stinehour
Jul 08 2016

ChyronHego has acquired Sound & Video Creations, the provider of the Click Effects family of products used in live sporting venues.  Financial terms of the transaction were not disclosed. ChyronHego Logo

Sound & Video Creations was founded in 1985 and is headquartered in Nashville, Tennessee.  The Click Effects products are used in venues to clickeffects
playback content on arena displays with data-driven graphics.

Customers range from small college athletics such as Rochester Institute of Technology to professional league venues such as Qualcomm stadium, home of the San Diego Chargers.  According to the press release, Click Effects systems are installed in more than 75% of Major and Minor League Baseball teams, almost 65% of NFL, NHL, and NBA stadiums.  The Company’s website lists a total of 896 installations, breaking down by use case as illustrated below.

ce-usecases

The vast majority of the clients listed on the website are located in North America.

This is the fifth acquisitions by ChyronHego since being taken private by Vector Capital in early 2015.  Earlier acquisitions included Newsroom Solutions (9/2015), Vidigo (9/2015), WeatherOne (4/2015), and ZXY Sport Tracking (4/2015).

Johan Apel, president and CEO of ChyronHego, commented “With sports fans paying a premium for tickets to live sports events, there is demand and an expectation for an ever more sophisticated A/V experience once inside the stadium. As a result, solutions for streamlining in-arena productions represent a growth market and an outstanding opportunity for ChyronHego.”

Cliff Wight, president Sound & Video Creations Inc, added “We’re proud of our achievement as the number one provider of stadium A/V solutions in the United States, and now — as part of the global ChyronHego development and sales organization — we’ll have a ready path for expanding our product set on a global basis. Also, ChyronHego’s culture and technology strategy, based on providing a comprehensive software-based ecosystem of integrated solutions, are an ideal fit with our own.”

 

Related Content:

Press release: Chyronhego acquisition of Click Effects

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Google Acquires Anvato to Complement Media Tech. Portfolio

Broadcast Vendor M&A | Posted by Josh Stinehour
Jul 08 2016

Google is acquiring Anvato, a provider of video processing functionality for multi-platform content delivery.  The acquisition was announced on the Google Cloud Platform blog by Belwadi Srikanth, Senior Product Manager.  Terms of the acquisition were not disclosed.  googlelogo_color_272x92dp

According to SEC filings, Anvato had raised $2.8 million in late 2008.  The Mountain View based company has several high-profile media clients including NBC Universal, Fox Sports, Univision, and Gray TV. Anvato

In the blog post announcing the acquisition, Mr. Srikanth cites the opportunity to participate in the media industry’s transition to over-the-top distribution models and the ongoing adoption of cloud solutions by media organizations.  “With OTT adoption rapidly accelerating, the Cloud Platform and Anvato teams will complement our efforts to enable scalable media processing and workflows in the cloud” writes Mr. Srikanth.

The Media Solutions portion of the Google Cloud Platform website highlights case studies with UK visual effects studio Framestore, US visual effects studio Atomic Fiction, and live video service provider iStreamPlanet (now owned by Turner).  There is overlap in the technology offerings of iStreamPlanet and Anvato, though any move by a cloud provider to offer higher level functionality will necessarily lead to overlap with existing customers.

Since its August 2014 acquisition of ZYNC Render, the Google Cloud Platform has been active in the post-production vertical.  At the 2016 NAB Show, Autodesk and Google announced integration between ZYNC and Autodesk’s Maya, a software video effects tool for animation, modeling, and rendering.  Maya users can offload rendering tasks, as needed, to the Google ZYNC Rendering service running on the Google Cloud Platform.  ZYNC pricing is consumption based and begins at $0.60 per machine hour.

Interestingly, prior to its acquisition by Google, ZYNC had been optimized to run on Amazon Web Services.

Anvato’s CEO Alper Turgut posted a message about the acquisition on the Company’s blog.  “We are thrilled to bring together Anvato with the scale and power of Google Cloud Platform to provide the industry’s best offering for OTT and mobile video. This will allow us to supercharge our capabilities, accelerate the pace of innovation, and deliver tomorrow’s video solutions faster, enabling media companies to better serve their customers” said Mr. Turgut.

 

Related Content:

Google Cloud Platform Blog Post on Acquisition

Press Release: Anvato Joins Google

 

 

Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

SES Completes Acquisition of RR Media; Renames MX1

Broadcast Vendor M&A, Media Services M&A, OTT Video | Posted by Josh Stinehour
Jul 06 2016

Satellite service provider SES today announced the completion of its acquisition of RR Media (NASDAQ: RRM), a provider of media services to the broadcast and media industries.  The acquisition was announced in late February 2016, but had been pending closing conditions and regulatory approvals.  RR Media’s shares ceased trading on the NASDAQ today.   SESLogo

As indicated in the original announcement, SES is merging the operations of RR Media with its Platform Services group to create a larger global media solution provider.  The new combined group will operate under the trade name MX1.  Avi Cohen, the previous CEO of RR Media, will serve as the CEO of MX1.MX1

The press release announcing the new trade name highlights the origin of MX1 from the below statement.

“Bringing it all together for the first time, MX1 aims to be the new number 1 in Media eXperience.”

SES’s new MX1 subsidiary will have 16 offices worldwide and six media centers.  MX1 is now responsible for distributing more than 1,000 TV channels, managing 440 channels of playout, and delivering content to over 120 subscription VOD platforms.

MX1 and SES’s HD Plus subsidiary will constitute the SES Media Solutions group led by Wilfried Urner.  HD Plus is a HD satellite TV offering in Germany.

Mr. Urner commented on the acquisition as follows, “We are confident that the new MX1 will leverage the expertise and success they have garnered in their respective key markets to expand their product portfolio. The addition of MX1 to the SES group is a first step in globalising SES’s video services business and in accelerating the completion of our goal to become one of the leading next generation media service providers”

Avi Cohen, CEO of MX1, added, “This is an exciting day for us as we introduce a new company to the industry and our new brand name and logo…This merger allows us to scale-up on a global basis and become the world’s leading media services provider, delivering next-generation digital video and media solutions to our worldwide customers.”

 

Related Content:

Press Release: SES Press Release on Completion of the Acquisition

Press Release: MX1 Reveals New Company Brand as a World-Leading Media Services Company

SES to Acquire RR Media for $242 Million in All-Cash Deal

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

deltatre Acquired by Bruin Sports Capital

Broadcast Vendor M&A | Posted by Josh Stinehour
Jun 30 2016

deltatre is being acquired by investment firm Bruin Sports Capital.  deltatre provides a variety of professional services for multi-platform content delivery within the sports vertical.  Clients include the ATP, BBC, BT Sport, English Premier League, FIFA, and UEFA.  deltatre is headquartered in Turin, Italy with offices throughout Europe.

deltatre had been a subsidiary of Italian parent Mediacontech, who owned all Class A shares, equating to 51% of the share capital of deltatre.  Mediacontech also had a minority interest in LMGR, the business controlling the remaining 49% of deltatre.

As part of an agreement with creditors in late 2013, Mediacontech had pledged to divest deltatre no later than December 31, 2016.  The divestiture process was initiated in the third quarter of 2015 and run by HSBC, who acted as the exclusive financial advisor.

The 2015 annual filing of Mediacontech provides some interesting background on the sale process.  110 potential buyers, both strategic and private equity, reviewed the opportunity to purchase deltatre.  In connection with the sale process, Mediacontech executed 40 non-disclosure agreements to allow for more detailed sharing of information on deltatre.

Based on a press release from Mediacontech the purchase price of the transaction was €122.1 million, with €62.2 million due in cash at closing.  The closing is expected to occur by the end of October 2016.  It is unclear in the press release whether the purchase price equates to an enterprise value.  Sportcal is reporting an estimate of enterprise value of €145 million.  Since the co-founders of deltatre, Giampiero Rinaudo and Luca Marini, are maintaining a significant minority interest (through their ownership position in LMGR), the purchase price likely represents an acquisition of less than 100% of the equity capital.

For the 2015 calendar year, deltatre had revenue of €57.4 million and EBITDA of €8.3 million.  Using the enterprise value figure of €145 million and 2015 financial results, the valuation of deltatre was 2.5x Revenue and 17.5x EBITDA.  Given 2016 is an even year with several significant events in Europe such as the European Football Championship, it is likely 2016 results will outperform 2015.  The sensitivity to the even and odd sporting calendar in Europe is apparent in deltatre’s historical revenue pattern. 2012 revenue was €45.3 million (London Olympics), 2013 revenue was €34.0 million, and then 2014 revenue was €56.5 million (Sochi Olympics).

In the annual filing discussing 2015 results, Mediacontech attributed the strong 2015 results of deltatre to a combination of early initiatives for the 2016 European Football Championship and the Rio Olympics; the successful geographic expansion France, Germany, and Switzerland; and the first European Olympic Games in Baku 2015.

Bruin Capital Sports was launched in January 2015 by sports business executive George Pyne.  Investors in Bruin Capital Sports’ fund include the advertising firm WPP.  Commenting on the deltatre acquisition, Mr. Pyne said “At Bruin Sports Capital we understand the importance of media and technology as tools for global engagement in sport, and believe with our experience and access to long-term flexible capital we can help deltatre continue to innovate and grow their business.”

Giampiero Rinaudo will remain the CEO of deltatre.  “Celebrating our 30th anniversary we believed there was still a lot of potential in deltatre, but we understood that the next level of growth needed a new partner that could really support us in our plans and long-term strategy” Mr. Rinaudo said.

 

 

Related Content: 

deltatre Press Release

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

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