Posts Tagged ‘Broadcast Vendor M&A’

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: Rovi Sells DivX and MainConcept to Parallax Capital and StepStone Group for $75 Million

Broadcast Vendor M&A, SEC Filings | Posted by Joe Zaller
Apr 01 2014

Rovi has sold its DivX and MainConcept businesses to Parallax Capital Partners and StepStone Group in a cash and stock deal valued at up to $75m

Under the terms of the deal, Rovi will receive an initial payment of $52.5m, and may receive up to three earnout payments over the next three years that could add another $22.5m to the transaction price. Any earnout payments will be based on the achievement of upon certain milestones agreed by the parties in the transaction.

Rovi had previously its intention to sell the DivX and MainConcept before the end of the second quarter of 2014 as part of a strategic effort to focus on growth opportunities related to its core entertainment discovery technologies and services.

“The sale of DivX was the last of a number of significant steps we’ve taken over the past year to realign the organization for sustainable, long-term growth and I’m pleased we met our commitment to complete this transaction, and did so ahead of schedule,” said Thomas Carson, President and CEO, Rovi Corporation.

The sale price represents a significant drop in value for DivX, which was acquired by Sonic Solutions in June 2010 for $323m.  Less than six months later, Rovi acquired Sonic Solutions for $720m.  At that time, Rovi said the combination of Rovi and Sonic “will be able to power the next generation of digital entertainment offerings with content discovery, delivery, and enhanced interactivity capabilities that support advertising and drive consumer engagement.”

The transaction is expected to close by April 1, 2014.

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Related Content:

DivX Purchase Agreement

Press Release: Rovi Announces Sale of DivX and MainConcept Businesses

Press Release: Parallax Capital Partners and StepStone Group to Acquire DivX

Rovi to buy Sonic for $720 million

Sonic Solutions to buy DivX in $323M bid to become digital media leader

Sonic Solutions Integrates Newly Acquired MainConcept, Forms New Pro Technology Division

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Masstech to Acquire PlayBox Product Line and Technology

broadcast technology market research | Posted by Joe Zaller
Mar 31 2014

Media Asset Management (MAM) specialist Masstech said today that it will acquire certain assets from PlayBox, a provider of channel-in-a-box (CiaB) technology. Terms were not disclosed.

Masstech says it intends to combine its existing MAM portfolio with CiaB solutions from PlayBox. “Adding PlayBox enables us to extend the Masstech platform to create the first fully integrated broadcast environment that includes playout and graphics within the asset management system,” said Masstech CEO Joe French.

Masstech says the combined solution “will be the first in which assets will be managed by an open platform across the entire broadcast chain, including ingest, production, and transmission, and embracing legacy infrastructure across all popular editing, automation and playout systems.”

Interestingly, Masstech is not actually buying PlayBox itself, but rather the company’s products and technology.

PlayBox Technology will continue to own and operate its existing system integration, support center and worldwide distribution through its eight offices in Europe, Asia and the United States, and their associated reseller networks.

Thus it appears the deal is part technology transfer, and part reseller agreement.

Indeed, both companies referred to the deal as a partnership.

Masstech CEO Joe French said “Our partnership with PlayBox will significantly expand the worldwide distribution of Masstech’s products and solutions through the PlayBox network.” Similarly, PlayBox founder and CEO Vassil Lefterov said “we have been looking for a strategic partner for a long time.  Our partnership with Masstech will allow us to take the next step in our company’s evolution.”

The deal is expected to close in May 2014.

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Related Content:

Press Release: Masstech Announces Intent to Acquire PlayBox Products and Technology

PlayBox Says it Had Strong Growth in 2011

PlayBox Says Sales Were Up 60 Percent in Q1 2011, Up 250 Percent Since 2008

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Strong Performance in Middle East Drives Vislink Broadcast Revenue 2.2 Percent Higher in 2013

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 28 2014

UK-based Vislink plc, reported that its revenue for 2013 was $99.3m (£59.9m), up 4.7% versus 2012.

Broadcast industry revenue was $79.7m (£48.1m), up 2.2% versus 2012.

Vislink owns multiple broadcast brands including Advent, Link, MRC and Gigawave.  Earlier this month Vislink announced it had acquired playout automation provider Pebble Beach for $24.7m.

On a group basis (including both broadcast and government sectors):

  • 2013 operating profit of $7.1m (£4.3m), an increase of 40.3 per cent increase compared to 2012

 

  • Gross margins were 40.6% in 2013, up from 39.4% in 2012

 

  • Order intake for the year was $99.6m (£60.1m), and the company ended the year with an open order book of $9.3m (£5.6m), up 7.7% versus the end of 2012

 

Broadcast Performance

Vislink’s broadcast products include satellite terminals and wireless communication systems that are used live events such as news, sports, and entertainment.

2012 broadcast revenue was £48.1m, up 2.2% versus 2012. Broadcast revenue accounted for 80.3% of total group revenue, down from 82.3% of total group revenue in 2012.

Revenue from Pebble Beach is not included in these figures.

For the broadcast business, the company’s geographic performance was as follows:

 

Vislink - Broadcast Revenus 2013 vs 2012

 

On a percentage basis the company’s best performing region was the Middle East and Africa, where sales jumped 49% versus the previous year.

The UK market decline 19.3% in 2013 after a strong performance in 2012, driven in part by the London Olympics. The company had slight growth in the rest of Europe, and experienced a decline in APAC.

2013 broadcast revenue in the Americas was down 10.1% versus 2012.  Vislink attributed this decline to cyclicality, saying “the US broadcast marketplace typically sees a reduction in spend in a post presidential election year.”  At the same time however, the company specifically highlighted the importance of South America, saying that the 2014 World Cup and 2016 Olympics have provided “an impetus for further investment in both broadcast and surveillance.”

 

Acquisition of Pebble Beach

The company used its earnings announcement to highlight its recent $24.7m acquisition of playout automation provider Pebble Beach, saying it will “contribute to the strategy of achieving higher recurring services revenues and achieving our financial objectives of £80m revenue and £8m adjusted operating profit by the end of FY 2014.”

Vislink said the key benefits of Pebble Beach are leading software technology, recently developed next generation products, a growing customer base, and strong cash generation and growth prospects.

The company said the acquisition of Pebble Beach “fits perfectly with Vislink’s desire for growth, recurring revenues, extending its reach and providing customers with synergies, from capturing video to interactive programming, including acquisition and revenue generation. Vislink plans to grow its software capability around the Pebble Beach Systems and management team.”

 

 

Move to AIM Market Eases Burden of Future M&A

Following on from the recent acquisition of Pebble Beach, Vislink telegraphed its intention to do more M&A deals in the future, saying the company will “continue to seek growth opportunities both organically and through acquisitions, with a clear underlying objective of continuing to grow shareholder value.”

“We remain on track for our plan to grow the business to £80m, and £8.0m adjusted operating profit by the end of FY 2014, and we intend to support this by way of a number of “bolt on” acquisitions,” said Vislink chairman John Hawkins.

Significantly, during 2013 Vislink switched its stock market listing to the UK’s AIM exchange, the London Stock Exchange’s international market for smaller growing companies.  Vislink says that the move to the AIM exchange will “simplify and reduce the financial burden of making acquisitions.”

 

Strategy and Outlook:

The company said its “markets continue to be tough but as long as we continue to balance our revenues and maintain our product leadership, the group will grow profitably.”

Vislink said it plans to expand its capability in delivering recurring revenues by exploiting its “newly acquired software capability in video playout” (Pebble Beach), and will grow our services offering by developing our network capabilities in cellular and hybrid application areas.

Vislink finished the year with $6.1m (£3.7m) in cash, down from $13.4m (£8.1m) at the end of 2012.  The company said it has more than 250 employees worldwide.

 

 

Related Content:

Press Release: Vislink plc – Results for the year ended 31 December 2013

Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

Broadcast Vendor M&A: Vislink Buys Amplifier Technology for up to $6.2 Million

Vislink Revenue Declines 7 Percent in Q3 2012, Reaffirms Plan to Double Revenue By End of 2014

More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Kudelski Buys Rival Conditional Access Vendor Conax for $226 Million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 27 2014

Swiss-based Kudelski said it will pay $226m to acquire rival conditional access provider, Conax AS, from Telenor Broadcast Holding AS.

This deal values Conax at approximately 2.2X revenue and 5.6X EBITDA.

In 2013 Conax had revenue of $103.7m, and EBITDA of $40.2m. In 2012 Conax had revenue of $96.1m and net income of $22.8m.

Kudelski, through its subsidiary Nagra, is one of the industry’s leading conditional access providers.  The company also owns pay TV middleware provider OpenTV, which it acquired from Liberty Media.

Buying Conax gives Kudelski another 380 customers in 85 countries, who between them serve approximately 140 million pay-tv consumers through a product portfolio encompassing both traditional broadcast products and complete solutions for multi-screen TV distribution.

André Kudelski, CEO of the eponymous company, says the addition of Conax will enable Kudelski to “further expand our customer portfolio in Asia, Latin America, Eastern Europe and Scandinavia.”

The deal will also help bolster Kudeslski’s pay TV revenue, which has been in decline.

In 2013 Kudelski reported pay TV-related revenue of $695m, down 4.4% versus 2012, including a year-on-year decline of 7.7% in Europe. In its 2013 annual report, Kudelski said that it expects weak fundamentals in Europe to continue to affect volumes in its core digital TV market.   Thus the addition of Conax makes sense for Kudelski.

The deal also makes sense for Telenor, which says that despite “a strong track record of international growth and high profitability, achieving global scale and enhancing market share will be key determinants of future success” in the highly competitive conditional access business.  Therefore Telenor has decided “the best way forward for Conax is with a new owner.”

Telenor says selling Conax “marks an important step for Telenor Broadcast in pursuing its stated strategy of focusing on its core activities within the Telenor Group.” One of Telenor’s core businesses, Canal Digital, will remain a Conax/Kudelski customer after the transaction.

The transaction is expected to close within 10 days.

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Related Content:

Press Release: Kudelski Group to Acquire Conax

Press Release: Telenor Broadcast divests Conax to Kudelski Group for NOK 1.5 billion

Press Release: Kudelski Group 2013 Annual Results

Kudelski 2013 Annual Report

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Electra Partners Buys Calrec Audio for $23.1 Million

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 24 2014

Leading broadcast audio console vendor Calrec Audio has been acquired by Electra Partners, a UK-based private equity firm for $23.1m (£14m) of equity and debt.

This is a relatively low valuation for Calrec Audio, which according to public records made an after-tax profit of $4.73m on revenue of $29.33m for the fiscal year ended March 31 2013.

Calrec’s products are primarily used for sports broadcasts and other live events. Its products are arguably the de-facto standard in the sports truck market, particularly in the United States.  Many broadcasters used the company’s products at the recent Sochi Olympics. For example, NBC Universal used five Calrec Artemis consoles in Sochi. Other Calrec customers include Al Jazeera, the BBC, CBS, Gamecreek, NEP and Sky.

The seller was consumer audio specialist D&M Holdings, which acquired Calrec Audio in 2007 for an undisclosed amount.

This is the second deal between D&M Holdings and Electra Partners in the past year. In June 2013, D&M sold audio specialist Allen & Heath to Electra for £43m. D&M acquired Allen & Heath in 2006 from Growth Capital Partners for £15m.

Part of our investment strategy when investing in Allen & Heath was to acquire additional businesses in the audio sector in order to create a group of market leading professional audio mixing brands,” said of Electra’s Investment Partner Charles Elkington. “We look forward to working with Roger Henderson and his team to continue to invest in developing new products for Calrec’s customers.”

“We are excited to be working with Electra Partners as we continue to develop our business into more international markets,” said Calrec Managing Director Roger Henderson.

Allen & Heath’s existing Chairman Malcolm Miller will work with both companies.

Having now sold both Calrec and Allen & Heath to Electra Partners, D&M Holdings has effectively exited the professional broadcast market.  D&M is best known for its consumer brands, which include Boston Acoustics, Denon, and Marantz.

In 2012 D&M Holdings sold off high-end consumer brand McIntosh Labs to Fine Sounds S.p.A. of Italy.

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Related Content:

Press Release: Electra Partners announces the acquisition of Calrec for £14 million

Press Releases: NBC Olympics’ Production of the 2014 Olympic Winter Games in Sochi to Utilize Five Artemis Consoles Provided

Broadcast Vendor M&A: PE Firm Acquires Allen & Heath Acquired in £43 Million Deal

Electra Partners – Allen & Heath Investment Rationale

D&M Sells McIntosh Labs to Italian High-End Marketer Backed by Private Equity

Press Release (2008):  D&M Holdings Acquires Calrec Audio of UK

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 19 2014

Vislink announced that it has acquired playout automation specialist Pebble Beach Systems for $24.7m (£14.9m). Pebble Beach will operate as a stand-alone unit within Vislink, and will continue to be run by its management, including founder Peter Hajittofi.

Under the terms of the deal, Vislink will pay £12.9m in cash, and £2m in newly issued Vislink shares.  Pebble Beach management must hold the new shares for at least two years. Vislink says the “transaction will be immediately earnings enhancing.”

For the fiscal year ended June 20, 2013, Pebble Beach had revenue of £5.64m, EBITDA of £1.3m, and profit before tax of £1.3m.  Thus the deal values the company at approximately 2.5x revenue, and 11.4x EBITDA. After backing out the £5.9m in cash Pebble Beach had in the bank, the net price paid by Vislink was £9m, valuing the deal at approximately 1.6x revenue and  7x EBITDA.

The fact that Vislink has made an acquisition is not surprising.

The company, which had revenue of £28m for the first half of 2013, has told the market for the past several years that it intends to grow its revenue to £80m, with 10% return on sales, by the end of 2014.  

Vislink, which recently moved its listing to the UK AIM market, has long-telegraphed telegraphed its intention to buy companies to achieve its stated goals for revenue growth and profitability.

In its most recent half-yearly results, company management said “we remain on track to grow the business to achieve turnover of £80m and £8m adjusted operating profit by the end of FY2014, and we intend to support this by a number of bolt on acquisitions in addition to achieving organic growth.”

However, it is interesting to note that Vislink decided to buy a  company in a different part of the broadcast value chain to help it achieve its stated intentions.

Vislink, which owns the Advent, Gigawave, Link, MRC, and PMR brands, is best known for its RF, microwave, and satellite communication products that are used by broadcasters in live production environments such as news and sports.

Pebble Beach products are used in broadcast playout applications, which does not have the same emphasis on live events.

Having said that, Vislink says that the Pebble Beach team will “assist Vislink in expanding its software capability as a Group,” so the acquisition could be the first of several deals that mark the beginning of a new business focus at Vislink.

Vislink explained the rationale for the deal saying Pebble Beach’s technology is complementary to its own, and that “the acquisition of Pebble Beach will move Vislink into the provision of software solutions for playout with advanced software technology,” and that “Vislink will now be able to offer broadcasters a complete ‘scene to screen’ solution.”  Vislink also highlighted the fact that Pebble Beach “will gain from access to significantly increased sales channels through the global network of over 900 broadcasters that Vislink works with as well as its international network of offices.”

“The acquisition fits perfectly into our long term strategy of acquiring software and services capability that we hope to drive recurring revenues for the group,” said Vislink chairman John Hawkins.

UK-based Pebble Beach has 60 employees, and regional offices in Dubai, Singapore, and the USA.

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Related Content:

Press Release: Vislink Acquires Pebble Beach

Broadcast Vendor M&A: Vislink Buys Amplifier Technology for up to $6.2 Million

Vislink Revenue Declines 7 Percent in Q3 2012, Reaffirms Plan to Double Revenue By End of 2014

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Quantel Acquires Snell

broadcast industry technology trends, Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 12 2014

Quantel has announced that it will acquire fellow UK-based broadcast technology vendor Snell.

The combined company will have revenue of more than $170 million and office in 16 locations around the globe, making it one of the larger vendors in the broadcast industry.

The enlarged company will be called Quantel and headquartered in Newbury UK, Quantel’s current HQ. According to an FAQ issued by the company, all existing products from Snell and Quantel will continue, and the Snell brand will remain.

Quantel CEO Ray Cross will lead the enlarged company.

Current Snell CEO Simon Derry will exit the business after acting helping to support the integration of the two companies for several months.

Paul Martin, Managing Director of the Snell TV Everywhere division and Rob Rowe, Managing Director of the Snell Live TV division will join the Quantel board, and Tim Banks, Snell Sales Director and Peter Fredericks, Snell Finance Director are also taking leading roles in the new combined organization.

 

UK-based Companies Have Little Product Overlap

Quantel and Snell are both based in the UK, and have a significant presence in many international markets.  Both companies are viewed as high-end players in the market, with good reputations for quality, reliability, and customer service.

Although the two companies have many common customers, they have virtually no overlapping product lines. Quantel focuses on post-production graphics and color grading systems, as well as enterprise-class networked editing systems, and media asset management.  Snell is known for production switchers, signal processing gear, playout automation, and channel-in-a-box products.

Both companies have UK-based R&D and manufacturing facilities, which will likely be rationalized over the course of time, resulting in significant cost savings for the combined entity. “We will be creating a new world-class facility at the company headquarters in Newbury to produce the complete Quantel and Snell product range and we look forward to the new ideas generated when the two R&D teams start to interact,” said Quantel CEO Ray Cross.

 

Common Parent Combines Broadcast Holdings

The combination of Quantel and Snell was long-rumored in the industry, since the two companies already had a common parent, Lloyds Development Capital (LDC), the investment arm of Lloyds Bank.

LDC has held a majority stake in both Quantel and Snell for a number of years, so a primary driver for the deal was likely the internal consolidation of LDC’s long-time holdings in the broadcast technology space, creating a larger, more efficient business, with greater operating leverage.

The complementary nature of the respective Quantel and Snell product portfolios should allow the enlarged company to continue serving the needs of customers, while realizing significant cost savings through the combination of R&D and manufacturing facilities, trade show booths, regional offices, etc.

This is similar to the approach outlined last month when Belden announced it will purchase Grass Valley for $220 million, and combined it with Miranda Technologies, which it already owns.  In 2012, Belden acquired Miranda for approximately $350 million.

Like Quantel and Snell, the combined Miranda and Grass Valley have limited product overlap and many common customers. Belden’s management has said it believes significant cost savings can be achieved by rationalizing duplicate functions within the combined company.

LDC acquired Quantel in July 2000, when it funded the company’s £51 million management buyout (MBO) from Carlton Communications.

In 2009, LDC created Snell when it funded the £72 million merger of Snell & Wilcox and Pro-Bel, in a deal supported by a £25 million package of senior debt and working capital facilities provided by The Royal Bank of Scotland and HSBC. After the merger, the combined company was renamed Snell.

LDC acquired Pro-Bel in 2003 when it funded an £11.2 million MBO from Chyron.

Prior to its merger with Pro-Bel, Snell & Wilcox was owned by Advent Ventures who had funded its £22 million management buy-out in 2002.

Both Quantel and Snell are private companies, so their individual revenue figures are not disclosed publicly.

A report published immediately after the merger of Pro-Bel and Snell & Wilcox in 2009  said Snell had revenue £80m and employed 450 staff; and in 2011 Snell CEO Simon Derry said in an interview that the company’s revenue was “greater than $130 million.”

According to its website, Quantel “employs around 300 people, and operates sales and support subsidiaries in the USA, Canada, Latin America, Hong Kong, China, Japan, Korea, Australia and throughout mainland Europe.”

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Related Content:

Press Release: Quantel acquires Snell to create new force in media technology

Quantel – Snell FAQ

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

Belden’s Acquisition of Miranda to Close on or Before July 27, 2012

TVNewsCheck Article (9-29-2011): Tech One-on-One With Simon Derry — Snell Aims To Master the U.S. Market

Advent Venture and LDC close £72m broadcasting merger

Advent Venture Partners and LDC Complete Their Portfolios Merger – March 9, 2009

Video: Pro-Bel and Snell & Wilcox CEOs Discuss Merger (2009)

Press Release (11-6-2003): Chyron Sells Pro-Bel to LDC

Broadcast Magazine (2002): Snell Secures £22m from Advent

Press Release (2002) Advent Venture Partners invests GBP13m in Snell & Wilcox

Variety Article (7-14-2000): Carlton sells tech arm Quantel to LDC for £51 million 

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Ross Video Expands News Tech Line-Up with Acquisition of ADS

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 10 2014

Ross Video announced that it has acquired Automated Data Systems (ADS), a provider of newsroom computer systems (NCRS) and broadcast prompters based in La Crosse, Wisconsin.  Terms were not disclosed.

Ross Video is buying ADS for its EZNews product line, a newsroom editorial system used by small call-letter TV stations, educational institutions, and government agencies.

As such the EZNews platform is a potentially a nice bolt-on acquisition for Ross Video, which surprised the industry with the introduction of an NCRS product called Inception at IBC 2013.

As with its previous acquisitions, Ross Video appears to be leaving the existing team in place, and enhancing the product development capability of the acquired company. Bill Sacia, former President of EZNews, has already changed his profile on LinkedIn, and now describes his job as ‘”leading the transition for EZNews clients to the new evolving, feature – function merging, more powerful Ross Inception Newsroom System.”

David Ross, CEO and majority shareholder of the eponymous broadcast technology vendor, told me that the company plans to incorporate the EZNews team into the company’s Inception NCRS development team.  “EZNews is the biggest of the small players in the NCRS market,” said Ross.  “We like the people and we really liked the ideas they’ve developed for smaller stations, and we plan to add these to our Inception product line.”

More importantly for Ross Video, EZNews has approximately 200 customer installations that can eventually be converted to the Ross Inception platform.  “200 customers is significant,” said Ross.  “It took Ross Video a long time to get that many customers for OverDrive” [the RossVideo production automation system].

Although Ross says the company put in place a full data migration plan for porting all EZNews technology and features over to its Inception platform, he does not seem to be in a hurry to do so. “We will continue to support EZNews customers and things will remain business as usual for them.”

One reason for this is that the primary customers for the EZNews system are colleges and universities who typically have smaller budgets than the TV station market where Inception is aimed.  Because EZNews has educational discounts built directly into its pricing, it tends to sell for significantly less than a typical broadcast NCRS system.

However, because these users are training the next generation of broadcast journalists, Ross sees them “as a very important long term customer base for Ross Video.” Therefore, Ross says he also has a plan to make it easy and cost-effective for EZNews customers who want to switch to the Inception platform.

“For the next year, all existing EZNews customers can upgrade, at cost, to (the more fully-featured) Inception platform. They’ll end up getting everything in EZNews and everything in Inception.  It’s really a great deal,” added Ross.

Ross will also continue to provide support for another ADS product, a popular, low cost windows based teleprompting software system called EZPrompt, which has more than 6,000 customers.

Including ADS, Ross Video has acquired eight companies in the past four years:

Most recently, Ross bought mobile video provider MCP, and announced its intention to create a national sports production company through the introduction of what it calls “openTruck” to Break Open Sports Production Market.

 

Previous Ross Video M&A deals include:

 

  • Montalto: Routing switcher research and development team

 

  • Cambotics: robotic camera heads and pedestals (2012)

 

  • Fx-Motion: “Furio” robotic camera systems (2012)

 

  • Norpak: data insertion and Nielsen products (2011)

 

  • Codan Broadcast: NK Series routing switchers (2010)

 

  • Media Refinery: XPression broadcast graphics (2010)

 

The ADS purchase is a classic Ross Video move.  The company has strategically used M&A to expand its product portfolio and increase its solution footprint in the broadcast market.

The strategy appears to be working.

Although Ross Video is a private company, the CEO occasionally uses social media to provide some metrics about its performance.  In November 2013 Ross said his company’s sales have increased for 22 straight years after achieving 8% revenue growth in fiscal 2013 versus the previous year.

In previous postings, Ross said the company’s year-over-year revenue growth in 2011 and 2012 was 47% and 17%, respectively.

According to my conversation with David Ross, the strategy also seems to be working for the acquired companies. “We’ve bought a lot of really cool companies, integrated them into Ross Video, and within a few years we’ve managed to increase their revenue by 5-10x.”

Given this track record, and the company’s family ownership, Ross can afford to be choosey when it comes to acquisitions.   And these days there seems to be a lot more to choose from.  Ross says he averages 1-2 inbound calls per week from executives who want to sell him their companies.

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It remains to be seen how well Ross Video fares in the NCRS business with Inception and EZNews.

For many years, the NCRS market seemed like a two-horse race between ENPS from the Associated Press and iNews from Avid.  Although neither AP nor Avid break-out revenue from their news products, the two companies are widely believed to have the lion’s share of category revenue between them.

However, it seems this market has been heating up as of late.  The IBC 2013 launch of Inception by Ross Video was one of several interesting developments in this area.

Other NCRS contenders include France-based Dalet Digital Media Systems. In the fourth quarter of 2013 Dalet’s revenue from TV newsroom systems was $17.9m (€12.9m), up 48.3% versus the previous year, and represented 35.1% of the company’s total revenue in the quarter.

Other vendors including Bitcentral and Masstech have also made inroads into the news technology market.

Nevertheless, David Ross remains very confident about his company’s prospects, saying the ADS acquisition “is a great step for Ross Video.  We look forward to the opportunity to grow even more into the newsroom market.”

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Related Content:

Press release: Ross Video Acquires Automated Data Systems (ADS)

Why Ross Video Bought MCP – Will Introduce “openTruck” to Break Open Sports Production Market

Broadcast Vendor M&A: Ross Video Buys Mobile Production Firm, Intends to Create National Sports Production 

Broadcast Vendor M&A: Ross Video Bolsters Routing Line with Sixth Acquisition in Past Four Years

Dalet Revenue Grows 7 Percent in 2013 on Strong Sales of Newsroom Solutions

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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