Posts Tagged ‘Belden’

Belden Makes it Official – Combination of Grass Valley and Miranda to be Called Grass Valley

broadcast industry trends, Broadcast Vendor M&A | Posted by Joe Zaller
Apr 02 2014

One day after Belden completed its $220m acquisition of Grass Valley, the company has officially revealed that the combined company will be called Grass Valley.

The company branding combines Grass Valley’s “GV” script and Miranda’s trademark, purple ellipse.

If you want to hear what’s next for the new Grass Valley, be sure to attend the annual IABM Annual NAB State of the Industry Breakfast at the 2014 NAB Show, where Grass Valley Marco Lopez will be featured on a panel of technology vendor CEOs that also includes Brian Cram from Dejero Labs, Charlie Vogt from Imagine Communications (formerly Harris Broadcast), and Carl Dempsey from Wohler Technologies.

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Combined GV-Miranda Logo

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Related Content:

Broadcast Vendor M&A: Belden Completes Acquisition of Grass Valley, Will Invest $25 Million in Integration of Combined Business

Broadcast Vendor M&A: Belden Buys Grass Valley for $220 Million

2014 NAB Show Session Details – IABM Annual NAB State of the Industry Breakfast

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Belden Completes Acquisition of Grass Valley, Will Invest $25 Million in Integration of Combined Business

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Apr 01 2014

Belden announced that it has completed the acquisition of the previously announced offer to purchase Grass Valley. When the deal was announced in February 2014, Benden CFO Henk Derksen told equity analysts that the $220m deal would be funded with existing cash.

Grass Valley had approximately $290 million in revenue according to Belden’ press release, so the deal values Grass Valley at 0.75 revenue.

It is believed that the enlarged company will be branded Grass Valley.

According to Belden, the value of the combination of the two companies is clear for both customers and shareholders is clear. The company says that by aligning both resources and strategies, the business will have a broader offering, while realizing the benefits of scale.

Belden also says the combined company “will be able to deliver the ability to simplify the purchasing and management of highly complex infrastructures.”

Belden says acquisition of Grass Valley will be immediately accretive to adjusted earnings per share with an estimated impact of approximately $0.20 in 2014 and $0.50 in 2015.

Much of the increased profitability of the new company is likely to come through synergy savings.

One of the hallmarks and core competencies of the Belden team is the efficient integration of acquired companies into the Belden family, and the associated inculcation with the “Belden Business System, including LEAN enterprise techniques and the Market Delivery System.”

There are many examples of Belden buying underperforming companies and subsequently using its internal processes to achieve strong financial performance and operating return.

Indeed, the company says “there is a significant opportunity in the application of the Belden Business System” in the case of Grass Valley

Derksen told analysts at the time of the announcement that Belden plans “to invest approximately $25 million during the first 12 months of integration largely through restructuring efforts to capture the value of the combined company. The strategic actions will include cost actualization, manufacturing footprint and leveraging a combined sales and marketing function and the implementation of lean principles.”

At same time Belden CEO John Stroup said “the result of the integration is unlikely to include meaningful reductions in R&D investment. However, I think there’s going to be an opportunity for Miranda to throttle back on some investments where Grass Valley’s stronger and for Grass Valley to throttle back on opportunities where Miranda’s stronger. Manufacturing is a clear opportunity. Today, Grass Valley outsources a lot of their manufacturing. We think there’s an opportunity for us to leverage our existing fixed cost structure, absorb that manufacturing. So that’s a clear opportunity to create value in the combined business and there’s clearly an opportunity to leverage our global sales force. Both of us at 200 and 300 million respectively, have created a global sales force calling on the same customers and we see a clear opportunity to improve our efficiency there. So the assumptions that we have in place include manufacturing cost synergies as well as the opportunity to leverage the combined sales organization, both in terms of cost and revenue.”

 

The following slides show the strategic rationale for the Miranda – Grass Valley merger, as explained by Belden in February 2014.

 

Belden Buys Grass - 1

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Belden Buys Grass - 2.

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Belden Buys Grass - 3

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Belden Buys Grass - 4

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Belden Buys Grass - 5

 

 

Given that it is believed that the combined company will be branded as Grass Valley, the deal marks a new beginning rather than the end of the road for the formidable broadcast brand.

Prior to officially becoming part of Belden, what is now Grass Valley has been through a number of strategic changes in the last 10-15 years.

This started in December 2000 when Thomson purchased Philips Professional, which at that time had revenue of approximately 250m Euros, and employed 1,050 people. Philips products, which included cameras, film imaging, signal processing, media networking & control, and systems integration services, became part of Thomson Multimedia.

After the Philips acquisition, the combined company, which was renamed Thomson Multimedia, had combined revenue of approximately 366m Euros.

In 2001, Thomson bought Grass Valley in 2001 for $172m.  At that time, Grass Valley had revenues of about $200m.

Technicolor then went on a buying spree, acquiring multiple companies that were ultimately folded into the Grass Valley brand.

Thomson added to its Grass Valley holdings with the 2005 acquisition Canopus for more than $100m.

By the late 2000s Thomson – which had by this time changed its name to Technicolor – put Grass Valley on the block, initially with what has been described as a very high price tag.

After several rumored bids, and more than a year on the block Technicolor sold what is now Grass Valley to Francisco Partners, a San Francisco – based private equity firm.

Technicolor retained other parts of the business, including transmitters and head-end equipment, and later sold-off these assets in two separate transactions.

Technicolor sold the Grass Valley transmission business to PARTER Capital Group.

The Grass Valley head-end business was sold to FCDE in March 2011.

Grass Valley is one of the industry’s great companies and I am sure that the people there are happy to finally have resolved their fate.  Let’s hope they can now focus on making great products – and of course money for their new owners.

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Related Content:

Press Release: Belden Announces Successful Completion of Grass Valley Acquisition

Broadcast Vendor M&A: Belden Buys Grass Valley for $220 Million

Press Release: Technicolor to sell its Broadcast Services activity to Ericsson

Belden Q3 2012 Revenue Declines 6 Percent, Miranda “Off to a Slow Start”

Broadcast Vendor M&A: Miranda Buys Softel

Belden Closes Deal to Acquire Miranda

More Broadcast Vendor M&A: Belden Buys Miranda for $350 Million in All-Cash Deal

More Broadcast Vendor M&A: Technicolor Closes Deal to Dispose of Grass Valley Transmission Business

Technicolor Receives Binding Offer for Video Head-End Business

Technicolor decides not to sell digital signage provider PRN

Technicolor completes sale of Grass Valley to Francisco Partners

 

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Belden Buys Grass Valley for $220 Million

broadcast technology market research | Posted by Joe Zaller
Feb 06 2014

Belden has submitted a binding offer to purchase privately held Grass Valley, a leader within the broadcast market, for $220 million.

The binding offer is subject to consultation with Grass Valley’s foreign labor works council, after which we will enter into a definitive agreement. Grass Valley provides innovative technologies including production switchers, cameras, servers, and editing solutions within the mission critical applications of broadcast customers. When combined with Miranda, the resulting end-to-end solution will be the most complete and compelling in the industry.

Grass Valley had approximately $290 million in revenue according to Belden’ press release, so the deal values Grass Valley at 0.75 revenue.

Even so, it’s probably not a bad deal for Grass Valley’s owner, PE firm Francisco Partners, which  purchased Grass Valley from Technicolor in 2011 (closed in January 2011), for no money down, and an $80 million promissory not payable five years from the date of the deal.

Part of Francisco Partner’s deal to buy Grass Valley included an undisclosed additional pay-out if Francisco Partners sold Grass Valley for a partner in the future.  Since these numbers are unknown, it’s difficult to know if the payments were triggered.

“The great thing about this overlap is the limited overlap,” said Belden CEO John Stroup.

“We are extremely excited to have Grass Valley join the Belden family. By combining Grass Valley and Miranda, we will create the broadcast industry’s largest and most complete portfolio,” said Mr. Stroup.

 

Here’s info on the deal and the rationale for it:

 

Belden Buys Grass - 1

Belden Buys Grass - 2

Belden Buys Grass - 3

 

Belden Buys Grass - 4

 

 

Belden Buys Grass - 5


Belden Buys Grass - 6


Related Content:

Press Release: Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding Offer to Acquire Privately Held Grass Valley for $220 Million

Press Release: Technicolor to sell its Broadcast Services activity to Ericsson

Belden Q3 2012 Revenue Declines 6 Percent, Miranda “Off to a Slow Start”

Broadcast Vendor M&A: Miranda Buys Softel

Belden Closes Deal to Acquire Miranda

More Broadcast Vendor M&A: Belden Buys Miranda for $350 Million in All-Cash Deal

More Broadcast Vendor M&A: Technicolor Closes Deal to Dispose of Grass Valley Transmission Business

Technicolor Receives Binding Offer for Video Head-End Business

Technicolor decides not to sell digital signage provider PRN

Technicolor completes sale of Grass Valley to Francisco Partners

 

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

Belden Eyes Improvement in Broadcast Business in Second Half of 2013 After “Tepid” First Six Months

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 12 2013

Belden said its broadcast revenue for the second quarter of 2013 was $169.7m,   up 7.1% versus last quarter.  The company said the sequential growth in broadcast was “driven largely by typical seasonal patterns.”

Broadcast operating profit margins were 14.2%, up from 4.7% last year (prior to the acquisitions of Miranda and PPC), and up 90 basis points sequentially, which the company said was in line with its overall results.

Belden management said that “broadcast markets in 2012 benefited from the Olympic Games and U.S. election cycle, with an unfavorable impact to the second quarter of approximately $2 million to $4 million on a year-over-year basis.”

On the company’s conference call with equity analysts, Belden CEO John Stroup described the broadcast market as cyclical, saying “2012 had a lot of demand as a result of the Olympic Games as well as the U.S. presidential election. And as a result, I think the first half (of 2013) was a little tepid (for broadcast), and I think we’ll see improvement in the second half (of 2013).

Although Belden did not break our revenue figures for Miranda, which it acquired last year, it did say that the Miranda business performed in-line with its expectations.

 

Outlook

“The global macroeconomic environment in 2013 is generally as we anticipated, and we remain confident in our ability to deliver consistent operating results in the second half of the year,” said Stroup.  “Therefore, we are increasing the midpoint of both our revenue and earnings outlook for the full year.”

Belden says expects third quarter 2013 adjusted revenues to be in the range of $525m – $535m and adjusted income from continuing operations per diluted share to be in the range of $0.90 – $0.95. For the full year ending December 31, 2013, the Company now expects adjusted revenues to be the range of $2.09 billion – $2.12 billion and adjusted income from continuing operations per diluted share to be in the range of $3.54 – $3.69.

Previously, the company said it expected full year adjusted revenues to be in the range of $2.07 billion – $2.12 billion and adjusted income from continuing operations per diluted share to be in the range of $3.49 – $3.69.

On a GAAP basis, Belden expects third quarter 2013 revenues to be in the range of $522m – $532m and income from continuing operations per diluted share to be in the range of $0.55 – $0.60. For the full year ending December 31, 2013, the company expects revenues to be in the range of $2.08 billion – $2.11 billion and income from continuing operations per diluted share to be in the range of $2.11 – $2.26.

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Related Content:

Press Release: Belden Reports Solid Results in Second Quarter 2013

Belden Q2 2013 Earnings Call Transcript

Belden Creates Broadcast Business Unit, Discloses Broadcast Revenue and Profitability

Belden Presentation (April 25, 2013) — Explanation of New Business Unit Reporting Structure

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Belden Creates Broadcast Business Unit, Discloses Broadcast Revenue and Profitability

Broadcast technology vendor financials | Posted by Joe Zaller
Apr 25 2013

Belden announced that it will now report its earnings according to the following four business segments: Industrial Connectivity Solutions, Industrial Information Technology (IT) Solutions, Enterprise Connectivity Solutions, and Broadcast Solutions.

The company said that these reporting changes have no impact to Belden’s consolidated financial results and no adjustment to previously provided financial guidance or strategic goals is intended or implied by this announcement.

Belden will be reporting results under these new business segments on the beginning with its Q1 2013 earnings announcement.

As per the chart below, the company had previously reported its financials according to geography.

Belden Segmentation

 

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Belden CFO Henk Derksen said that the reporting changes are a more intuitive and insightful way to present Belden’s results going forward changes, and that the solutions-based orientation enables Belden to be more focused and agile as an organization, and provide investors with further transparency into the company’s business operations.

The broadcast business will continue to be managed by Strath Goodship (Miranda CEO), Dave Jackson, and Jimmy Rayford (Belden VP, Business Development).

Denis Suggs, EVP, Americas Operations & Global Cable Products, who had previously overseen the broadcast business, has decided to pursue opportunities outside of Belden. Denis will continue at Belden through July to allow for an orderly transition. “We thank Denis for his solid performance over the past six years, and appreciate the strong team he has assembled. We wish Denis the best in his future endeavors.” said John Stroup, president and CEO of Belden.

As shown below, the company’s broadcast solutions segment consists of Belden’s existing broadcast sales as well as those of Miranda (acquired in July 2012 for $362m) and PPC (acquired in December 2012 for $515.7m).

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Belden Broadcast Segment Financial Metrics

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Belden’s broadcast business had 2012 revenue of $362.6m in 2012.  However these results include only 5 months of revenue from Miranda, and minimal contribution from PPC.

According to Derksen, if full year 2012 revenue from both Miranda and PPC were included in the broadcast business figures, total broadcast revenue in 2012 was $684m with an operating margin of 13-15%. For reference, according to previously published reports Miranda’s last full year of reported revenue was approximately $180m, and PPC’s revenue in 2012 was approximately $238m.

As part of the changes to reporting, Belden will no longer report geographic results on a regular basis, but may occasionally report geographic results for illustrative purposes.  However, in order to help analyst transition their financial models, Derksen disclosed that 87.2% of 2012 broadcast revenue came from the Americas, 7.9% was from EMEA, and 4.9% was from APAC.

Similarly the company will not make product results available as the company mores from product sales to solution selling.

The company also said it will not be breaking out its operating expenses (R&D, G&A, and sales and marketing) on a segment basis.

Derksen said these changes were made because “the old way of looking at Belden is no longer insightful” due to the many changes at the company and in its markets over the past several years.

“This announcement marks another key milestone in the transformation of our business. We believe this action highlights our strategic focus on continuing to build leading global businesses with strong financial attributes. Through this, Belden can deliver even more value to our enterprise, industrial and broadcast customers around the world and quickly capitalize on new market opportunities,” said Stroup.

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Related Content:

Press Release: Belden Announces Formation of Global Business Segments

Revenues at Miranda Technologies Down 10 Percent in Q4 2012

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Revenues at Miranda Technologies Down 10 Percent in Q4 2012

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Mar 04 2013

Miranda Technologies posted Q4 2012 revenue of approximately $44.3m, down about 10% versus the same period a year ago (when the company reported record revenues for both the quarter and the full year), and down about 8% versus the previous quarter.

The results were disclosed in a regulatory filing from parent-company Belden, which stated: “Our revenues and income (loss) from continuing operations before taxes for 2012 included $73.6 million and ($11.5 million), respectively, from Miranda. Included in our income from continuing operations before taxes for 2012 are $10.6 million of cost of sales related to the adjustment of inventory to fair value and $10.9 million of amortization of intangible assets. In addition, we recognized $2.5 million of transaction costs associated with the acquisition in 2012, which are included in our selling, general, and administrative expenses.”

Miranda was acquired by Belden in July 2012 for $374.7m, and its results have been included in Belden’s consolidated financial statements since July 27, 2012.

Because of the timing of Belden’s purchase of Miranda, the company’s revenue for the full year 2012 is unknown.  This is because Miranda did not report its results for the second quarter of 2012 as it was acquired by Belden just prior to the date when it was scheduled to announce these results.

Miranda did however, disclose revenue for Q1, Q3, and Q4 2012 of $41.35 (C$42.2m), ~$48m and ~$44.3m respectively, or approximately $133.65m in aggregate for the three quarters.

Miranda’s revenue for the full year 2011 was $177.3 (C$181.9m), so unless the company had revenue in excess of $43.65m in the second quarter of 2012, its 2012 revenue will have been lower than the previous year.  Miranda’s revenue for the second quarter of 2011 was $42.1m (C$43.2m).

Please keep in mind that the above numbers are approximate due to exchange rate fluctuations between the Canadian Dollar and the US Dollar since the beginning of 2011.

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Related Content:

Belden FY 2012 10-K Filing

Belden Q4 and FY 2012 Earnings Presentation

Previous Quarter: Belden Q3 2012 Revenue Declines 6 Percent, Miranda “Off to a Slow Start”

Broadcast Vendor M&A: Miranda Buys Softel

Belden Closes Deal to Acquire Miranda

More Broadcast Vendor M&A: Belden Buys Miranda for $350 Million in All-Cash Deal

Previous Year: Miranda Reports 27% Revenue Increase in 2011

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Broadcast Vendor M&A: Miranda Buys Softel

Broadcast Vendor M&A | Posted by Joe Zaller
Jan 25 2013

In a move that it says will bolster its playout offering, Miranda Technologies announced that it will acquire Softel, ad UK-based, provider of captioning and subtitling technology. Terms of the deal were not disclosed.

This is Miranda’s first acquisition since the company was purchased by Belden in 2012.  At that time Belden executives said that they intended to use Miranda as a “platform” through which they could build a larger business in the broadcast industry through strategic M&A.  Although this initial deal is a “bolt-on” to Miranda’s existing playout business, it offers evidence that Miranda will indeed continue to be a consolidator in the broadcast technology market.

According to Miranda President Marco Lopez, captioning is one of the areas of the playout chain that is often difficult to manage. “By introducing Softel’s technology into the Miranda portfolio and directly integrating it into our iTX solution, we’ll present broadcasters with further efficiencies, not only in the purchase process, but also during deployment and in post-sale support as well. Miranda will continue to support the full Softel solutions suite and honor all Softel partner agreements.”

“We’re certain our customers will benefit from the synergies this acquisition creates,” said Sam Pemberton, Softel’s CEO. “Being aligned with Miranda in the Belden family extends our reach into potential new markets and being part of this team allows us to focus on continuous innovation.”

Integration planning will be led by a team of Miranda and Softel executives, but there will be no business disruption for Miranda or Softel during the transition. The integration is expected to be complete by this summer.

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Related Content:

Belden Q3 2012 Revenue Declines 6 Percent, Miranda “Off to a Slow Start”

Belden Closes Deal to Acquire Miranda

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Belden Q3 2012 Revenue Declines 6 Percent, Miranda “Off to a Slow Start”

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 12 2012

Belden reported that its revenue for the third quarter fiscal 2012 was $490.4m, down 6% versus the same period a year ago, and up 1% versus the previous quarter.

The Q3 net loss was $38.8m, or $1.14 per share, versus net income of $31.2m last year, and a net income of $42.4m during the previous quarter. The operating loss for the quarter was $7.6m, versus operating income of $51.9m last year, and operating income of $58.35m last quarter.

Third-quarter SG&A expenses were $88m, or 17.8% of revenue. R&D expenses for the quarter were $18.1m. The company said that both SG&A and R&D expenses increased sequentially, and year over year, as a result of the addition of Miranda, which was acquired by Belden at the end of July 2012. After adjusting for the impact of foreign currency and Miranda, SG&A and R&D expenses combined were down more than $3m year over year.

The networking and connectivity segments, which include Miranda, contributed $161.8m of consolidated revenues, or 33%, up 3 percentage points versus last year.

Broadcast-related revenue in the quarter was $98.1m, or 20% of total revenue.  The company said that broadcast revenue was impacted by the timing of new product launches.

Belden CEO John Stroup said Miranda, which was part of Belden for two months of the quarter, was “off to a slow start, contributing approximately $32m of revenue and $0.08 of earnings per share during the quarter on an adjusted basis.”

This implies that Miranda’s revenue for the full third quarter was approximately $48m, essentially flat with the same period a year ago when Miranda reported a profit of C$13.2m on revenue of C$48.8m. (Miranda did not report results last quarter because their acquisition by Belden closed before the reporting data).

Stroup also said that the company anticipates Miranda to contribute $46m of revenue in the fourth quarter of 2012, implying an 8% decline versus Q4 of 2011 when Miranda reported revenue of $50.1m.

 

Guidance

Belden said it expects adjusted revenues for the fourth quarter 2012 to be $500m – $510m and adjusted income from continuing operations per diluted share to be $0.72 – $0.77.

For the full year 2012 Belden expects adjusted revenues to be $1.94Bn – $1.95Bn, down from last quarter when the company said it expected adjusted revenue, inclusive of Miranda, to be in the range of $1.95Bn to $1.97Bn.

The company maintained its full year EPS target of $3.00 – $3.05.

“Clearly, the weak demand environment presents challenges and the uncertainty affects our visibility. We believe this climate is likely to continue, therefore we’ll focus on driving improvements to the business through the implementation of our strategic plan. Despite these pressures, we remain committed to our full year EPS guidance,” said Stroup.

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Related Content:

Belden Press Release: Adjusted Earnings up 10% on Solid Operating Results in Third Quarter 2012

Belden Q3 2012 Earnings Call Presentation

Previous Belden Quarter: Belden Grows Earnings 22 Percent on Lower Revenue in Q2 2012, Closes Miranda Acquisition

Previous Year – Miranda: Miranda Reports Record Revenue and Profit in Q3 2011, Raises Margin Targets

Belden Sells Off Chinese CE Assets

Belden Closed Deal to Acquire Miranda

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Impressions of IBC 2012: M&A, Cloud, Multi-Platform, 4K, Efficient Operations, CiaB, and the “Return of Grass Valley”

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, content delivery, market research, technology trends | Posted by Joe Zaller
Sep 20 2012

A previous version of this article appeared in the “Tech Thursday” Spotlight Section of TVNewsCheck

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Against the backdrop of the ongoing European debt crisis and the afterglow of the 2012 Olympics, nearly 51,000 visitors made their way to Amsterdam for the annual IBC trade show. Major themes of the five-day broadcast technology jamboree included vendor consolidation, buzz about new technologies for multi-screen content delivery and social TV, futuristic technology demonstrations, and several important new product introductions.

The broadcast vendor community got a little less fragmented on the first morning of IBC, with a merger announcement by two Norway-based video transport technology providers — Nevion and T-VIPS

Although no additional deals were unveiled at the show, vendor consolidation was one of the most discussed themes at IBC, and according to statements made by some of the leading vendors, there is potentially a lot more consolidation on the way.   

Newly acquired Miranda technologies made its debut as a “Belden brand” at IBC, and Belden EVP Denis Suggs was on hand at the show to meet customers and explain his company’s vision for the broadcast industry, and why they decided to buy Miranda in one of the largest broadcast technology M&A deals in recent years. 

In a nutshell, Belden saw the opportunity to acquire a cash-generating company with a top-class management team that’s growing faster than the overall market and jumped at it. Including Miranda, Belden now generates approximately $450 million a year in broadcast-related revenue, making it one of the industry’s largest players, and it appears they are not done doing deals in this space. 

Suggs said Belden views Miranda as a platform from which is can further expand its broadcast industry operations, and that it intends to support Miranda’s existing plan for further acquisitions.

Grass Valley CEO Alain Andreoli echoed a similar sentiment at his company’s press conference. He said that Francisco Partners, the private equity firm that owns Grass Valley, has a $3 billion fund behind it and will support Grass Valley’s efforts to become an industry consolidators.

When the dust settles, he said, Grass Valley may not be the largest player, but it will certainly be in the top three. Last year, Grass Valley bought PubliTronic, a provider of channel-in-a-box (CiaB) technology, to gain a larger foothold in the playout market. Expect to see Grass Valley and other players making additional strategic moves that help them enter attractive new market spaces.

But most IBC M&A talk centered on Harris Broadcast, which is currently being divested by its parent company. Although rumors were flying at the show about who might buy the division, its executives were tight-lipped. Harris Broadcast President Harris Morris would only say that the deal is progressing according to plan, and is on track to be completed as soon as the end of 2012.

New products and services based on cloud technology, multi-platform content delivery and social TV services dominated many demonstration and hallway conversations at IBC, particularly in the “Connected World” pavilion, where dozens of new and established firms displayed a host of products aimed at securing a place in this emerging ecosystem.

Despite the enthusiasm of vendors, many buyers publicly and privately expressed caution about the technology.

Critics of cloud technology cited immature technology, bandwidth limitations, security, and an unproven business case as barriers to its adoption. Likewise, broadcasters and content owners expressed concern over the “disconnect” between the desire of end-users to receive and consume video content on an ever-increasing number personal devices, and the ability of broadcasters to create sustainable and profitable multi-platform business models.

Cloud-based discussions at IBC ranged from real-world case studies of how EVS helped broadcasters set up private clouds to facilitate remote production of the Euro 2012 soccer championships and London Olympics, to practical solutions from Signiant and Aspera for managing the delivery of file-based content over IP-enabled and cloud-based infrastructure, to new solutions for cloud-based video production.

Cloud-based production is an emerging trend, but initiatives such as the ‘Adobe Anywhere’ initiative will prove to be a catalyst in this area. Taking cloud-based production to the “next level” are new firms like VC-backed start-up A-Frame, which is building from the ground-up a complete cloud-based video production environment that marries the experience of broadcast and post-production experts with forward-thinking IT-based software experts. 

On the multi-screen front, Ericsson introduced its first encoder based on HEVC/H.265 compression technology. The company says that its HEVC implementation offers the potential for users to reduce bandwidth by up to 50%, thereby enabling more efficient delivery of content over multiple platforms, including mobile networks.

Harmonic unveiled a new version of its ProMedia transcoder, aimed at enabling its customers to deliver an integrated multi-screen experience to their subscribers. Harmonic also introduced new members of its senior management team: CMO Peter Alexander, and CTO Krish Padmanabhan, who recently joined the company from Cisco and NetApp, respectively.

Noticeable by their absence on the Harmonic booth at IBC were the familiar Omneon and Rhozet brand names, which have now been absorbed into Harmonic. “Harmonic is a branded house, not a house of brands, and our singular focus is delivering excellent video quality to consumers everywhere,” said Alexander.

The Sony/SES Astra demonstration of live delivery of 4K images over satellite drew a lot of attention.

For many years, 4K images have been trade show “eye candy” for visitors, but at IBC 2012 Sony and SES showed that technology exists today to transmit high quality 4K images over satellite at a manageable 50mbit/s using h.264 compression technology.  The stunning live video images were delivered via an SES satellite to an 84-inch Sony Bravia 4K display.

The demo prompted speculation that 4K will be the “next HD” in terms of consumer adoption and broadcast infrastructure upgrades. Other observers took a more practical approach, saying that the industry might see 4K being used as a high-end production format in near to mid term, but that it will be a long time before broadcasters who have already spent millions on the transition to HDTV decide to upgrade again to 4K.

Indeed, when it comes to broadcast infrastructure upgrades it is operational efficiency, not higher resolution, which appears to be the primary demand of broadcasters. Thus, many vendors at IBC were promoting solutions designed to help broadcasters transition their operations to file-based and IT-oriented workflows. 

One of the ongoing initiatives in this area has been the development by a large number of vendors of integrated IT-based playout technologies, more commonly known as channel-in-a-box (CiaB).  These systems offer the promise of increased operational efficiency and significant cost savings through the integration of previously disparate playout and master control functionality into a single IT-based platform. Over the past several years, major vendors including Grass Valley, Miranda, Snell, Harmonic, and Evertz have offered products.

At IBC 2012, Harris became the latest entrant into the market with the launch of Versio, a CiaB system based on several of the company’s existing technology platforms including the Nexio server family, ADC automation, and Inscriber graphics. 

When describing the new Versio product at the company IBC press conference, Harris Morris said the No. 1 requirement for automated IT-based playout systems is reliability, and that this is an area where Harris Broadcast excels. Morris also emphasized that CiaB platforms rely heavily on automation technology, where Harris Broadcast is an established leader, making the company a natural choice for broadcasters considering integrated IT-based playout.

Although Harris Broadcast touted the fact that their Versio platform is based on the company’s existing technology platforms, it stopped well short of saying that the new system is a direct replacement for its current products, particularly its popular Nexio server family.

Instead the company described Versio as a robust cost-effective way for broadcasters to quickly add new services and digital subchannels channels, and to provide backup in emergencies.

“Channel-in-a-box should be about opening up new possibilities rather than limiting how a broadcaster can operate across multiple on-air scenarios,” said Andrew Warman, senior product manager at Harris Broadcast. “It’s limiting to look at channel-in-a-box as a system replacement for servers, automation, and other play-to-air systems. Broadcasters need freedom to build appropriate workflows for their operations, including external components.”

However, other vendors clearly see the CiaB market differently, and have taken a very different approach than Harris Broadcast, especially those firms that do not have an existing playout server business to protect. 

Snell Chief Architect Neil Maycock said that his company’s ICE platform is not only “ready for prime-time,” it is on the air today delivering high value content for major broadcasters.  Maycock also said that ICE has a unique architecture that enables it to scale from a single channel implementation, through a multi-location centralcasting model, to a large multi-channel playout environment.

PlayBox CEO Vassil Lefterov said he has built his entire business on disrupting the traditional server-based playout market. “We believe our singular focus on this application is a key advantage,” he said.  “Playbox has thousands of live channels on the air today and is working to re-define playout operations for many of our customers.”

Grass Valley, which like Harris has a significant video server business, took a more pragmatic approach.  SVP and CMO Graham Sharp said that “it’s likely CiaB and other IT-based playout systems may ultimately impact everyone’s server business, so we’ve taken the decision to cannibalize our own products where necessary by embracing IT technology, because if we don’t do it to ourselves someone else will.” 

Grass Valley was among the vendors with significant new products. Introductions included a new LDX camera platform that scales from a basic model to a high-end super-slow motion system; a new video server family, and brand new electronics for the Kayenne and Karrera production switchers.  Grass Valley said all its new products feature native 1080p processing, and provide straightforward upgrades via software.

Grass Valley also made bold claims about its future product plans, stating that by 2014 it will have replaced its entire portfolio with all new 1080p, IT-focused products. 

GV’s Sharp also hinted at a major NAB 2013 announcement from Grass Valley: “Next year we will introduce a completely new integrated IP-based platform that is totally format agnostic.” he said.  “We believe this new platform will enable a new way of working that we call non-linear production….”

All Grass Valley products, including those launched at IBC 2012, will be compatible with the new architecture, he said.

Sharp concluded GV press conference by saying: “If there is one take-away from this presentation about Grass Valley, it’s this: We’re back.”

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KIT Digital To Cut 300 Jobs in Effort to Right Size Operations

Broadcast technology vendor financials | Posted by Joe Zaller
Sep 18 2012

KIT Digital has implemented a “significant workforce reduction,” which will result in job losses for approximately 300 employees, or 22% of its current headcount, by the time it is completed.

KIT says these actions will save it approximately $40m on an annualized basis, enabling it to “right size its operation and streamline general corporate functions” while maintaining a high standard of customer service.

The majority of the expense reductions will arise from “non-core areas and general and administrative redundancies.”

This announcement is one of the first public moves by KIT Digital activist investor turned interim CEO Peter Heliand, who took control of the company at the beginning of September, leading to the departure of former CEO Barak Bar-Cohen. Heiland, who was also an activist shareholder in Miranda Technology prior to its sale to Belden, owns approximately 8% of the outstanding shares of KIT digital, primarily through JEC Capital Partners, where he is Managing Director.

“By accelerating the integration of the company, we will be able to enhance our product offerings, improve time-to-market efficiency, and bring the business to a place of financial strength,” said Heiland. “While we have completed some non-core divestures and reduced the non essential support infrastructure, we are preserving all of the strategic initiatives surrounding our core competencies as we believe they will drive significant growth.”

The company said the restructuring plan will take place primarily during the third quarter of 2012 and will be completed by the end of calendar year 2012. The company currently estimates that it will record a restructuring expense in the third quarter of 2012 of approximately $4m consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.

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Related Content:

Press Release: KIT digital Restructuring Aligns Expenses With Operations

Former KIT Digital CEO Bar-Cohen Resigns After Activist Investor Takes Control

KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

KIT Digital Exploring Strategic Options for Company Sale, Fails to Reach Agreement with JEC Capital

KIT Digital Chairman Resigns, Cites Differences With Board of Directors Over Strategic Sales Process

Streaming Media.Com Article: What’s Going on with KIT Digital?

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

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