Posts Tagged ‘Broadcast Vendor M&A’

Broadcast Vendor M&A: ChyronHego to be Taken Private by Vector Capital in $114 Million Deal

Analysis, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Nov 17 2014

Broadcast graphics specialist ChyronHego announced that it has entered into a definitive agreement with Vector Capital, under which an affiliate of Vector will acquire all of the outstanding shares of ChyronHego common stock for $2.82 per share in cash.

San Francisco-based Vector Capital is a private equity firm with experience in the digital media sector. Recent portfolio investments include Corel and Technicolor. To fund the ChyronHego deal, Vector has secured committed financing consisting of a combination of equity and debt.

This is the second recent take-private transaction of a broadcast graphics provider. Earlier this month. Vizrt announced that it will be taken private by Nordic Capital in a $374m all-cash deal.

The $2.82 per share purchase price represents a premium of approximately 18% over the company’s average closing share price for the six months ending on November 14, 2014, and a 4% premium over the company’s closing share price on November 14, 2014, the last day of trading before the announcement.

Based on the total number of shares outstanding in ChyronHego, the deal equates to an equity value of approximately $114m. After backing out the cash on the company’s most recently published financial statements, this represents an enterprise value of approximately $108m.  On a valuation multiple basis, this is approximately 1.8x trailing 12 month’s revenue.

According to a shareholder FAQ, ChyronHego’s management team will stay the same after the transaction closes. Johan Apel will continue as CEO, and Soren Kjellin will continue as CTO.

The contractual details of the ChyronHego – Vector Capital agreement are complex and worth a longer discussion. We are preparing an analysis of the deal, and we will post this later this week.

A very brief synopsis of certain deal points follow:

  • Technically, the deal is a merger rather than an acquisition. ChyronHego is being merged into an entity controlled by Vector Capital, in order to create a new corporate entity, which will also be owned and controlled by Vector Capital.

 

  • All major shareholders on the ChyronHego management team have agreed to re-invest approximately 50% of their holdings in ChyronHego into the new corporate entity, for which they will receive approximately 31% of the equity in the new entity

 

  • Interestingly the merger agreement includes a “go shop” provision whereby ChyronHego has seven weeks to find a buyer who will offer a higher price than Vector Capital’s offer of $2.82 per share. Given Vizrt’s valuation in the Nordic Capital deal, and the fact that shares of ChyronHego have traded above $3.00 several times during the past year, it is possible that ChyronHego will be able to find a better offer. However, the “go shop” provision includes termination fees that will triggered under specified circumstances such as the acceptance of a superior offer. The company says it does not intend to disclose developments with respect to the solicitation process unless and until a decision has been made in respect to any potential superior proposal. 

 

The transaction is subject to customary closing conditions and most notably the approval by holders of two-thirds of ChyronHego’s outstanding shares and the approval by holders of a majority of shares held by current ChyronHego’s stockholders who will not become stockholders in the going-forward entity.  The Company expects the transaction to close in the first quarter of fiscal 2015.

The company said that its  board of directors and a special committee of the board composed entirely of independent directors have unanimously approved the deal, and have recommend that ChyronHego’s stockholders approve the transaction

“We are very happy to announce this partnership with Vector Capital, an established global technology oriented private equity firm that is focused on building long-term value. Our management is convinced that this is the right opportunity at the right time for ChyronHego’s customers, employees and stockholders,” said Apel.

In the third quarter of 2014, ChyronHego posted a net loss of $2.6m on revenue of $14. During the first nine months of 2014, ChryronHego posted a net loss of $2.8m on revenue of $43.3m.

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Related Content:

ChyronHego Investor FAQ and Introduction to Vector Capital

Agreement and Plan of Merger: ChyronHego Corporation, Vector CH Holdings (Cayman), L.P., And CH Merger Sub, Inc.

ChyronHego SEC Filing: Entry into a Material Definitive Agreement with Vector Capital

ChyronHego One Year Stock Price Chart

Broadcast Vendor M&A: Vizrt to be Taken Private in $374 Million All-Cash Deal

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Vizrt to be Taken Private in $374 Million All-Cash Deal

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

Broadcast graphics and MAM specialist Vizrt announced that it will be taken private in an all-cash deal that values the company at $374m.

The buyer is Nordic Capital, a leading Nordic PE firm with four active funds with over EUR 11 billion in total committed capital. Under the terms of the deal Vizrt will be merged with 24 October Holding AG, an entity indirectly controlled by Nordic Capital Fund VIII, and NOR Merger Sub Ltd.

The transaction values Vizrt at a 32% premium to the company’s closing share price November 7, 2014, the last trading day prior to the announcement of the deal, and a 35% premium to the company’s six months volume weighted average share price of the for the period ending on November 7, 2014.

“I and the management team are excited about the opportunities we all believe we have ahead of us,” said Vizrt CEO Martin Burkhalter. “Nordic Capital is very committed to support our growth strategy going forward. Being a privately owned company opens up for accelerated growth opportunities through, amongst others, future acquisitions that support our long-term strategy. The discussion management has held with Nordic Capital over the last few months gives us the necessary confidence that Nordic Capital will fully back-up our continuous efforts to stay ahead of the game by further strengthening our innovative capabilities.”

The deal is expected to close on or around January 31, 2015, provided all conditions for completion have been fulfilled.

Completion of the transaction is subject to the approval by a Shareholders Meeting of Vizrt by simple majority which is expected to be held on or about December 18 2014. Shareholders representing 51.5% of the total share capital of Vizrt have declared that they will vote in favor of the deal

“Our Board has undertaken a careful review of the terms and conditions of the Merger and is unanimous in its recommendation. We consider the cash based offer as fair and in the best interest of our shareholders. We believe that Nordic Capital, with its breadth of expertise and proven track record of developing companies, will be a strong owner of Vizrt.” stated Dag J. Opedal, Chairman of the Board of Directors of Vizrt.

The Company and Nordic Capital shall cooperate for a delisting of the Company’s shares from the Oslo Stock Exchange as soon as possible after the Merger becomes effective.

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Related Content:

Press Release: Nordic Capital to pay NOK 37 in cash per VIZRT Ltd. Share

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© Devoncroft Partners 2009 – 2014. All rights reserved.

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Broadcast Vendor M&A: DTS Acquires Manzanita Systems

Broadcast Vendor M&A | Posted by Joe Zaller
Sep 22 2014

Audio technology specialist, DTS Inc. has acquired Manzanita Systems, a provider of MPEG software solutions for digital television, video on demand (VOD), and over-the-top (OTT) markets.  Terms of the deal were not disclosed.

Manzanita is best known in the video technology sector for its transport stream analyzers and software multiplexer solutions.  Manzanita’s technology is integrated into the solutions of several technology vendors, especially those involved in the transcoding and distribution of video content.

This is DTS’s first acquisition since its purchase of SRS Labs in July 2012. The addition of Manzanita’s video technology portfolio is an interesting move for DTS and may suggest a greater expansion into the video sector as a complement to DTS’s position in the audio sector.

“We are committed to growing our business in the network-connected media ecosystem and believe that the acquisition of Manzanita Systems will help DTS further strengthen its position in the space,” said Geir Skaaden, SVP Digital Content and Media Solutions at DTS.

Consistent with the seller rationale for many M&A transactions, Manzanita will now have access to significantly more resources as part of DTS.  According to Manzanita’s founder and CEO Greg Vines “joining DTS allows us to take advantage of its much larger platform and scale to further develop our product portfolio and offer customers even greater value.”

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Related Content:

Press Release: DTS Acquires Manzanita Systems

DTS Reports Strong Q2 2014 Results; Revenue Growth of 33% Year-over-Year

More Broadcast Vendor M&A: DTS to Acquire SRS Labs for $148 Million

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Oracle to Acquire Front Porch Digital

Broadcast Vendor M&A | Posted by Joe Zaller
Sep 14 2014

Oracle announced that it has signed an agreement to acquire library and archive management provider Front Porch Digital.

Terms of the deal were not disclosed.

According to Oracle, Front Porch Digital’s management team and employees are expected to join Oracle and continue in their current capacity

On the face of it, this is a deal that makes sense. Thanks to the widespread use of digital acquisition technology, the industry has seen huge growth in the amount of digital content being created, with shooting ratios expanding to up to 200:1 At the same time content owners are increasingly looking to find additional value in their media assets, and must find a way to efficiently manage and monetize them, either on-premise or in the cloud.

Oracle’s media and entertainment storage platforms come primarily through the its acquisition of Sun Microsystems in 2010.  Sun had previously acquired LTO library provider StorageTek.  After acquiring Sun, Oracle put renewed emphasis on its media storage products, just as digital content creation exploded, and archive management became an increasingly important requirement.

By combining Oracle’s disk-based and LTO storage platforms, with FPD’s storage management solutions, Oracle now has the capability to sell both the storage hardware and the crucial software management layer that supports it, and do so at scale.

 

Oracle buys FPD -- benefits of combination

 

Oracle says the acquisition of Front Porch Digital “will create a comprehensive, high-performance cloud or on-premise digital content storage management solution that empowers customers to modernize and simplify content management, increase efficiencies, optimize resources, and increase their bottom line.

Of course this combination also raises competitive issues, since Front Porch Digital’s partner ecosystem includes a wide variety of other storage vendors, who may in future shy away from working with a management platform owned by a competitor.

To counter this issue, Oracle says it “is committed to maintaining Front Porch Digital’s open integration platform with third-party systems and applications, and plans to further augment Front Porch Digital solutions with Oracle technologies to deliver enhanced features and functionalities.”

“Organizations need a modern, integrated content storage management solution to manage and monetize their valuable rich media assets,” said John Fowler, Executive Vice President of Oracle Systems. “We will continue to build on Front Porch Digital’s success and unique capabilities, which complement Oracle’s existing high performance and scalable engineered storage solutions.”

“Front Porch Digital has developed industry leading solutions that help companies manage large-scale digital content,” said Mike Knaisch, CEO, Front Porch Digital. “We are thrilled to be joining Oracle to continue our long-standing partnership. This combination will enable us to better serve and support our customers at a global scale.”

The proposed transaction is subject to customary closing conditions. Until the transaction closes, each company will continue to operate independently, and it is business as usual.

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Related Content:

Press Release: Oracle Buys Front Porch Digital

Oracle Acquires Front Porch Digital — General Presentation

Oracle Buys Front Porch Digital — FAQ

Customer and Partner Letter | Oracle and Front Porch Digital

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© Devoncroft Partners 2009 – 2014.  All Rights Reserved.

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Broadcast Vendor M&A: TSL to Merge with IPE

Broadcast Vendor M&A | Posted by Joe Zaller
Sep 12 2014

Two UK-based broadcast systems integrators, TSL and IPE, announced that they intend to merge. Terms of the deal were not disclosed.

The proposed merger is being done at the holding companies level, and includes both the systems integration and product businesses of each firm.

When the deal closes, IPE’s Colin Judge will become Managing Director of the systems company.

Chris Exelby will become Managing Director of the products company, which will include IPE’s IDS line of Integrated Display Systems to the TSL Products’ portfolio of broadcast equipment.

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Vitec Group Announces Intention to Divest IMT Wireless Communications and Microwave Business

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

The Vitec Group, which owns more than a dozen brands in the broadcast industry said that it has decided to exit its Integrated Microwave Technologies (IMT) business unit, which provides wireless microwave products.

The announcement was made in an investor presentation that accompanied Vitec’s earnings announcement for the first half of 2014.

However, company executives stressed that, until a transaction occurs, it will continue to manufacture, sell, support, and honor the warranty of all IMT products provided to its broadcast customers.

Vitec’s IMT business includes three brands: Nucomm, RF Central, and Microwave Services Company.

Vitec IMT Brands - Nucomm, RF Central, Microwave Svs Co

Vitec’s IMT business posted a loss of £1.1m during the first half of 2014, compared to a profit of £1.4m for the same period a year ago.  IMT’s 1H 2014 revenue was £5.8m, down 35% versus the same period last year.

For the full year 2013, IMT broke even on revenue of £14m, which included a large profitable contract from the US Department of Justice, worth approximately £3.4m.

The company says that the disposal for IMT will allow it to focus its Videocom business on its core broadcast activities.

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Vitec acquired Nucomm and RF Central in a transaction valued at up to $73m in June 2007.

At that time, Vitec said the deal would immediately enhance its earnings, and that “the acquisition is an excellent fit with Vitec’s Broadcast Systems division. The acquired companies sell to similar customers and Vitec’s infrastructure is expected to provide opportunities for further growth internationally.”

The purchase of Nucomm and RF Central coincided with the start of a huge wave of spending related to the 2.4 Ghz Broadcast Auxiliary Service (BAS) Relocation Project, whereby wireless operator Sprint, in response to a 2004 FCC decision, implemented a program to resolve ongoing interference between public safety and commercial operations in the 800MHz band.

By the time of the project’s official completion in 2010, Sprint had spent about $750 million and broadcasters had moved their ENG and other contribution applications to new compressed digital channels between 2025MHz and 2110MHz.  Sprint said more than 1,000 engineers were employed during the project and that as many as 100,000 pieces of microwave and ENG equipment were installed.

The strategy paid off almost immediately for Vitec, which said the following in its full year results for 2007:  “RF Systems is performing well, with sales and operating profit in the seven months of Vitec ownership of £23.5 million and £3.3 million respectively. Pro-forma 12-month sales and operating profit for 2007 were £32.2 million and £5.2 million. Both RF Central and Nucomm, have launched well-received ‘High Definition’ products that will maintain our competitive position. 2008 and 2009 results will be buoyed by revenue from the BAS relocation project, which is expected to fall away by 2010.”

Today however, Vitec says that its IMT business is now “relatively small part of our business, which provides wireless microwave products for the Military, Aerospace and Government (MAG) markets.”

Vitec explained the rationale for the decision to exit IMT saying: “We have attempted to grow IMT in an increasingly challenging market that has become overly price driven. This was recently demonstrated by the award of certain large government contracts to competitors at prices where we would not generate positive returns. There are limited synergies between IMT’s MAG business and other activities within the Group.

“As a result, we have decided to exit the IMT business and we are accessing our options of a sale or closure. Our preliminary assessment of the net exit costs based on closing the business is an exceptional one-off pre-tax charge in the region of c.£5.5 million, after foreign exchange recycling, of which c.£5.0 million is anticipated to be a cash outflow. We will provide an update on the exit from IMT in due course.”

In addition to anticipated fall-off in business following the completion of the BAS relocation project, another likely catalyst for Vitec’s decision to sell the IMT business is the strong performance by Teradek, which Vitec acquired in August 2013 for up to $15m.

The chart below, from Vitec’s 1H 2014 earnings call with equity analysts describes the declining sales at IMT and strong growth by Teradek, and announces the company’s intent to divest IMT in order to focus on its core broadcast activities.

 

Vitec 1H 2014 with IMT & Teradek outlined

 

According to Vitec’s most recent earnings announcement, “the Teradek business that we acquired in H2 2013 is performing well with strong growth post-acquisition. The business continues to develop innovative products, including the new Bolt wireless transmitter that was released in July 2014 and further product launches are planned for later in the year.”

Based on the success of Teradek during the period, Vitec made a $3.2m “earnout” payment to Teradek’s former shareholders in March 2014. This consisted of $2.4m in cash, and 72,933 new Vitec ordinary shares worth a further $800,000.

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Related Content:

Vitec Group 1H 2014 Results: Videocom Down 1%, Bexel up 39.9%

Broadcast Vendor M&A: Vitec Buys Teradek for $15 Million

Press Release (2007): The Vitec Group Plc Acquisitions of Nucomm and RF Central

Vitec Group 2007 Full Year Results: A Year of Strong Growth

Vitec Group Presentation (2007): “RF Systems ‘Consolidate and Grow” announcing purchase of Nucomm and RF Central

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Vitec Group 1H 2014 Results: Videocom Down 1%, Bexel up 39.9%

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Aug 14 2014

The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, said that its total revenue for the first six months of 2014 was £152.9m, a decrease of 3% versus the first six months of 2013.

Operating profit for the first half of 2014 was £19.2m, down 3% versus last year.

Despite the lower top-line results the company achieved an operating margin of 12.6%, equal to the first six months of 2013.

On organic basis at constant currency, its revenue was up 3.8% versus the first half of 2013, and that its operating profit increased by 6.3%

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Vitec Videocom Division

Vitec’s broadcast-focused Videocomm division is made up of more than dozen brands that serve various parts of the broadcast industry: Anton/Bauer, Autoscript, Camera Corps, Teradek, The Camera Store, Haigh-Farr, Litepanels, Microwave Service Company, Nucomm, OConnor, Petrol Bags, RF Central, Sachtler, Vinten and Vinten Radamec.

For the first six months of 2014, Videocom revenue was £69.5m, down 1% versus the first six months of 2013.

Videocom operating profit for 1H 2014 was £8.5m, down 2.3% versus last year, resulting in an operating margin of 12.2%, flat with the year earlier period. Operating profit on a constant exchange rate basis was up by 1.2%.

Profitability was helped by the cost control measures and a restructuring program of the Videocom division, which Vitec says is now largely complete.  The company also said that it has also close to completing completed the relocation of certain UK manufactured products to Costa Rica completed to schedule in the first half of 2014.

The company also said that it results were helped by the Sochi Winter Olympics, and a strong performance from Teradek, which was acquired by the Vitec Group during the second half of 2013. Based on the success of Teradek during the period, Vitec made a $3.2m “earnout” payment to Teradek’s former shareholders in March 2014. This consisted of $2.4m in cash, and 72,933 new Vitec ordinary shares worth a further $800,000.

Offsetting the strength of Teradeck and the boost from the Olympics was a poor performance by the IMT business, a “relatively small part of the Videocom division” that provides microwave and which provides wireless microwave products to customers in the Military, Aerospace and Government (MAG) market.

 

Vitec Group 1H 2014 -- Videocom performance

 

The IMT business posted a loss of £1.1m during the first half of 2014, compared to a profit of £1.4m for the same period a year ago.  IMT’s 1H 2014 revenue was £5.8m, down 35% versus the same period last year. For the full year 2013, IMT broke even on revenue of £14m

As a result of the poor performance in MAG space, which Vitec says is an “increasingly challenging market that has become overly price driven,” the company has decided to exit its IMT business, and is currently assessing its options of a sale or closure.”

Vitec says that the divestiture of the IMT business will allow it to focus the Videocom division on its core broadcast activities.

The company highlighted the performance of several its brands, saying:

Our camera supports brands experienced a lower level of project activity. However we have continued to grow sales of our premium robotics products across all regions

 

  • Prompters performed in line with last year

 

  • Litepanels LED lighting products and Anton/Bauer mobile power products performance has been lower than expected. We are in the process of broadening our LED lighting product range to maintain our leading position in the market, and are launching some new, innovative mobile power products.

 

  • The Teradek business that we acquired in H2 2013 is performing well with strong growth post-acquisition. The business continues to develop innovative products, including the new Bolt wireless transmitter that was released in July 2014 and further product launches are planned for later in the year.

 

 

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Vitec Services Division (Bexel) Revenue Jumps 39.9 Percent

For the first half of 2014, revenue from Vitec’s Services Division, which primarily comes from Bexel, was £19.8m, up 39.9% versus the first six months of 2013.

Vitec Group 1H 2014 -- Services (Bexel) performance

The company attributed Bexel’s growth to contracts associated with the Sochi Winter Olympics, the FIFA World Cup, and an increase in in its rental business.

Bexel’s operating profit for 1H 2014 was £2.1m compared to £200,000 last year.  This translates to an operating margin of 10.9% for the first half of 2014, versus an operating margin of 1.4% for the year ago period.

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M&A Activity: Two Businesses Acquired During 1H 2014

Vitec purchased to companies during the first six months of 2014.

In March 2014, the Videocom division acquired the assets of the Specialty Cameras division of SIS Outside Broadcasts Limited through a business combination for a cash consideration of £1.8m, and a potential earnout of up to £1.4m. The deal gives Vitec new specialty camera including the “Stump Cam” used in international cricket matches, and the “Plunge Cam” that tracks high divers from the dive to underwater.

In April 2014, Vitec reached an agreement to acquire UK teleprompter vendor Autocue, for a net consideration of £6m. This deal has yet to close, as it is subject to clearance by the UK Competition and Markets Authority.

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Related Content:

Press Release: The Vitec Group plc Half Year Results to 30 June 2014

Press Release: The Vitec Group plc 2013 Full Year Results

Previous Year: Vitec Group 1H 2013 Results: Videocom Revenue Down 5.1 Percent, Bexel Flat

Broadcast Vendor M&A: Vitec Buys Teradeck for $15 Million

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Telstra Buys Online Video Platform Ooyala for $360 Million Equity Value

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Aug 13 2014

Telstra, Australia’s largest telecommunications provider, has paid $270m to purchase 75% of online video platform provider Ooyala. When the deal closes, Telstra will own 98% of Ooyala.

Telstra previously invested $61m over two funding rounds to acquire 23% of Ooyala. In June 2012, Telstra participated in a $35m fundraising round. In December 2013, Telstra invested an additional $43m in Ooyala. 

The deal values Ooyala at $360m, which slightly overstates the cash price incurred by Telstra since its actual cash outlay was $331 million ($270m + $61m).

$360m is a strong valuation for Ooyala, which has 330 employees and is forecasting revenue of $65m for calendar year 2014.  It’s also a strong valuation in the context of an analogous public comparable Brightcove, which trades on the NASDAQ.

Brightcove’s stock presently trades at an equity value of approximately $200 million, though Brightcove is meaningfully larger than Ooyala on a revenue basis. Assuming similar gross margins as Brightcove, these data points would suggest Ooyala has yet to reach profitability.  However, it would appear prioritizing growth over profitability was a beneficial strategy since the implied revenue multiple is 5.5x and the cash-on-cash return to investors was approximately 4.4x (as detailed below).

Ooyala was founded in 2007 and raised approximately $122 million before the acquisition by Telstra.  $61 million of this amount was from Telstra itself; the remaining $61 million included participation from Ropart Asset Management, Amazon Web Services, Sierra Ventures, Rembrandt Venture Partners, The CID Group, ITOCHU Technology Ventures, Motorola Mobility Ventures, and EDB Investments Pte. Ltd.

Ooyala is the first investment by Telstra’s Global Applications & Platforms group, whose mission is to create “long-term global growth in markets that are adjacent to Telstra’s core business, where software disrupts traditional business models.”

In announcing the transaction, Ooyala’s CEO Jay Fulcher posted an open letter to Ooyala employees, which enthusiastically outlines the rationale for the transaction and discussed the future market opportunity.  “Our opportunity is enormous” said Fulcher. “The market for the technologies and services we provide is will be [sic] worth tens of billions in the next few years. To win requires a heavy investment in people, infrastructure, R&D and technology.”

The transaction will require US regulatory approval, though is expected to close within 60 days.

Ooyala will operate as an independent subsidiary of Telstra, retaining both its brand and management team.

In 2013, Telstra generated more than $AUD 26 billion in revenue.

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Related Content:

Press Release: Telstra to acquire leading video platform company Ooyala

An open letter to Ooyala employees from CEO Jay Fulcher

Press Release: Ooyala Receives $43 Million Investment From Telstra To Accelerate Adoption of Its Market-leading Video Analytics

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Strong MAM Sales Drive 23 Percent Revenue Increase for Dalet in Q2 2014

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Jul 30 2014

MAM and newsroom specialist Dalet reported that its consolidated revenue for the second quarter of 2014 was €10.7m, up 23% versus the same period a year ago, and up 42% versus the previous quarter.

Excluding a contribution of €1m from AmberFin, which Dalet acquired in April 2014, the company’s revenue in the second quarter of 2014 was €9.7m, up 23% versus the same period a year ago, and up 27.6% versus the previous quarter.

Dalet published the table below to show the difference impact of the AmberFin acquisition.

Dalet Q2 2014 Results with and without AmberFin

 

Gross margins for the second quarter of 2014 were 82%, down from 89% last year, and up from 79% last quarter.   This is the second consecutive drop in gross margins comparted to the previous year.  The company attributed the lower y/y margin performance to due to a less favorable sales mix in the quarter.

 

On a product basis:

  • Asset management revenue was €5.35m, or 50% of total revenue in the quarter

 

  • TV Newsroom systems revenue was €2.89m, or 27% of total revenue in the quarter

 

  • Sport solutions revenue was €535,000, or 5% of total revenue in the quarter

 

  • Radio solutions revenue was €1.6m, or 15% of total revenue in the quarter

 

  • Integration revenue was €321,000, or 3% of total revenue in the quarter

 

In terms of sales mix, license revenues decreased from 33% of sales in H1-2013 to 28% in H1-2014, associated professional services evolved from 30% to 23%, resale of hardware increased from 16% to 23%, recurring support revenues increased from 22% to 26% of revenues.

 

The company said that sales in the Americas increased by 21%, and the region now accounts for 40% of consolidated revenue. The increase in Americas revenue may be due in its win at Fox Sports 1, which is using Dalet’s “Sports Factory” as the end-to-end production and MAM system.  Fox Sports 1 launches on August 17, 2013.

Europe accounted for 48% of revenue, while MEA and Asia-Pacific accounted for 8% and 4% respectively.

The company did not disclose any other financial metrics, including profitability.

 

Results for the First Half of 2014:

For the first six months of 2014, the company’s consolidated revenue was €18.4m, up 20% versus the first half of 2013.  Excluding AmberFin, the company’s revenue for the first six months of 2014 is up 13% versus the same period in 2013.

Gross margins for the first half of 2014 were €14.9m, or 81%, down on a percentage basis from 87% for the first six months of 2013.

Dalet ended the second quarter of 2014 with €6.5 in cash, down from€7.7m on December 31, 2013.

Debt on June 30, 2014 stood at €5.6m, up from €2m on December 31, 2013, following the €3.4 million loan taken to finance AmberFin`s acquisition.

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Related Content:

Press Release: Dalet Revenues for First Six Months of 2014: €18.4 million

Broadcast Vendor M&A: Dalet Acquires AmberFin

Previous Quarter: Dalet Revenue Grows 3 Percent in Q1 2014

Previous Year: Dalet Up 7 Percent in Q2 2013 Thanks to Big Jump in Americas Revenue

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: EVS Disposes of dcinex Stake for €10.8 Million

broadcast industry trends, Broadcast Vendor M&A | Posted by Joe Zaller
Jul 21 2014

EVS announced that it has reached an agreement to sell its 41.3% stake in dcinex, a digital cinema solutions provider, to Ymagis SA.

The company says that the deal, which values decinix at up to  €10.8m, will allow EVS to focus fully on its four core market strategy in the broadcast sector.

Originally called XDC, dcinex was founded  in 2004 by EVS co-founder Laurent Minguet, and changed its name to dcinex in 2012. It’s principal activities are digital cinema, distribution of alternative content (Ddcinema) and development of the Cinestore products.

Under the terms of the deal, EVS will receive at the closing:

  • EUR 2.1 million in cash
  • 288,851 new Ymagis shares
  • EUR 6.4 million in Ymagis bonds, which have a maximum maturity of 5 years. These bonds are associated with warrants.
  • In addition, dcinex will reimburse the currently existing shareholders` loans. Today, the loan granted by EVS (including interests) amounts to EUR 1.5 million.

In total, the approximate aggregate value of the different components (at last closing Ymagis share price of EUR 7.90) represents around EUR 10.8 million for EVS. On March 31, 2014 dcinex was valued at EUR 7.9 million on the EVS balance sheet.

Joop Janssen, CEO of EVS, said: “dcinex was created within EVS 15 years ago. In 2004, it was decided to spin it out. With the support of EVS, dcinex has developed itself to become a leading provider of digital cinema services in Europe. In the bigger entity that will result from this transaction, dcinex will be even stronger to continue its successful evolution in that market. EVS will now fully focus on its four core market strategy (Sport, Entertainment, News and Media) in the broadcast sector.”

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