Posts Tagged ‘ChyronHego’

2016 Big Broadcast Survey (BBS) Reports Now Available

broadcast technology market research, Broadcast Vendor Brand Research, market research | Posted by Josh Stinehour
Jul 21 2016

The 2016 Big Broadcast Survey (BBS) Reports are now available.

We have been publishing the BBS Reports since 2009.  Each new edition is created through several months of research, including interviews with technology end-users, global surveys of technology decision makers, analysis of the end-user responses, and visualization of the data collected.  Now in its eighth year of publication, the BBS remains the most comprehensive annual study of technology end-users in the global broadcast and media technology industry.  Nearly 10,000 technology professionals in 100+ countries participate in the BBS each year, making it the largest market study of the media technology industry.

Based on feedback from technology vendors, media companies, and investors, we have updated the vendors, product categories, and market trends profiled in the 2016 BBS to better align with recent market developments.

Select updates include the global tracking of IP Standard Adoption, a product level review of the 4K upgrade cycle, and planned usage of programmatic advertising exchanges.

The continual updates over the past eight years have helped the BBS reports remain a critical reference for industry executives to improve strategic decision-making, customer engagement, marketing strategy, product planning, and sales execution.  In addition to technology vendor and service provider strategic planning, BBS reports are also used frequently for M&A and investment activities by both buyers and sellers.

Three types of 2016 BBS reports are available:

  • 2016 BBS Global Brand Reports: provides deep insight into how each more than 100 broadcast technology suppliers (see full list below) are perceived by market participants, along with comprehensive benchmarking of broadcast technology vendors on a wide variety of metrics
  • 2016 BBS Product Reports: provide detailed information from buyers, specifiers, and users of broadcast technology products in 32 separate categories (see full list below)
  • 2016 BBS Global Market Report: provides detailed information about industry trends, major projects being planned, products being evaluated for purchase, current and future plant infrastructure, broadcast technology budgets, and planned deployment of new technologies including 4K, HEVC compression, and IP-based technology infrastructure

 

For additional information on the 2016 BBS report, please call or email me.

As is Devoncroft’s custom, we will publish highlights from this year’s BBS reports on the Devoncroft website.  These articles are posted on a semi-regular basis, so please check back often.

To receive posts when published, please enter register with your email in the box in the upper right-hand corner of the page.

The below table of logos (in alphabetical order) lists the technology vendor brands covered in the 2016 BBS.

2016-BBS-Logos

 

Technology Product Categories & Vendor Brands Covered in the 2016 BBS, by Application Area

 

Acquisition & Production:

ENG Cameras

Canon, Hitachi, Ikegami, JVC, Panasonic, Sony

Large Format Single Sensor Cameras

ARRI, Blackmagic Design, Canon, Red, Sony

Production Switchers

Blackmagic Design, For-A, Grass Valley, NewTek, Panasonic, Ross Video, SAM, Sony

Studio / System Cameras

Grass Valley, Hitachi, Ikegami, JVC, Panasonic, Sony

 

 

Post Production: 

Graphics & Branding

Adobe, Autodesk, Avid/Orad, ChyronHego, Evertz, Grass Valley, Imagine Communications, Ross Video, Vizrt

Video Editing

Adobe, Apple, Avid, Blackmagic Design, EVS, Grass Valley, Imagine Communications, Sony

 

 

Content Communications and Infrastructure:

Bonded Cellular

Dejero, LiveU, Teradek, TVU

Routing Switchers

Blackmagic Design, Evertz, Grass Valley, Imagine Communications, Ross Video, SAM, Utah Scientific

Signal Processing / Interfacing / Modular

Aja Video, Axon, Blackmagic Design, Evertz, For-A, Grass Valley, Imagine Communication, Ross Video, SAM

Video Transport

Aspera, Cisco, Ericsson, Evertz, Harmonic, Imagine Communications, Lawo, Media Links, Net Insight, Nevion, Riedel, Signiant

 

 

Storage:

High Performance Shared Storage:

Avid, Harmonic, Hitachi, HPE, Isilon Systems/EMC, NetApp, Quantum

Playout / Transmission Servers

Avid, EVS, Grass Valley, Harmonic, Imagine Communications, Ross Video

Production Servers

EVS, Grass Valley, Harmonic, Rohde & Schwarz, SAM

 

 

Audio:

Audio Consoles

Avid, Calrec, Lawo, Salzbrenner Stagetec, Solid State Logic (SSL), Soundcraft, Studer, Wheatstone, Yamaha

Audio Processing & Monitoring

Adobe, Avid, Dolby, Linear Acoustic, RTW, TSL, Wohler

Intercom / Talkback

Clear-Com, Riedel, RTS Intercom Systems, Trilogy

Microphones

AKG, Audio-Technica, beyerdynamic, Electro Voice, Marshall Electronics, Neumann, Schoeps, Sennheiser, Shure, Sony

Monitors (speakers)

Adam, Avid, Focal, Genelec, JBL, KRK Systems, Mackie, Neumann, PMC,

 

 

System Automation and Control:

Broadcast Business Management Systems

arvato/S4M, Imagine Communications, MediageniX, MSA Focus, SintecMedia, Wide Orbit

Archive & Archive Management

Masstech, Oracle/Front Porch Digital, Quantum, SGL, XenData

Media Asset Management

arvato/S4M, Avid, Dalet, EVS, Imagine Communications, Prime Focus Technologies, Vizrt, VSN

Playout Automation

Grass Valley, Imagine Communications, Pebble Beach, Playbox, Snell

Workflow Orchestration / BPM

Aspera, Avid, Imagine Communications, IBM, Sony, Telestream

 

 

Playout and Delivery:

Encoding / Transcoding

Arris, ateme, Cisco, Dalet/AmberFin, Elemental Technologies, Ericsson, Harmonic, Imagine Communications, Telestream

Integrated Playout (Channel in a Box)

Evertz, Grass Valley, Harmonic, Imagine Communications, Pebble Beach, Playbox, SAM

On-line / Streaming Video Delivery Platforms

Brightcove, Kaltura, Neulion, Ooyala, Piksel

Transmitters

GatesAir, Hitachi, NEC, Plisch, Rohde & Schwarz, Screen Service, Toshiba

 

 

Test, Quality Control and Monitoring:

Multiviewers

Avitech, Axon, Evertz, For-A, Grass Valley, Imagine Communications

Test & Measurement

Imagine Communications, IneoQuest, Leader, Phabrix, Rohde & Schwarz, Tektronix

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

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

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

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

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

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

ce-usecases

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

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

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

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

 

Related Content:

Press release: Chyronhego acquisition of Click Effects

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

2015 Big Broadcast Survey (BBS) Reports Now Available

broadcast technology market research | Posted by Joe Zaller
Aug 04 2015

The 2015 Big Broadcast Survey (BBS) Reports have now been published and are available from Devoncroft Partners.

We have been publishing the BBS Reports since 2009.  Each new edition is created through several months of research, including interviews with technology end-users, global surveys of technology decision makers, analysis of the end-user responses, and visualization of the data collected.  Now in its seventh year of publication, the BBS remains the most comprehensive annual study of technology end-users in the global broadcast and media technology industry.  Nearly 10,000 technology professionals in 100+ countries participated in the 2015 BBS, making it once again the largest market study of the media technology industry.

Based on feedback from technology vendors, media companies, and investors, we have updated the vendors, product categories, and market trends profiled in the 2015 BBS to better align with recent market developments.

These updates help ensure the BBS reports remains a critical reference for industry executives to improve strategic decision-making, customer engagement, marketing strategy, product planning, and sales execution.  In addition to technology vendor and service provider strategic planning, BBS reports are also used frequently for M&A and investment activities by both buyers and sellers.

Three types of 2015 BBS reports are available:

  • 2015 BBS Global Brand Reports: provides deep insight into how each more than 100 broadcast technology suppliers (see full list below) are perceived by market participants, along with comprehensive benchmarking of broadcast technology vendors on a wide variety of metrics

 

  • 2015 BBS Product Reports: provide detailed information from buyers, specifiers, and users of broadcast technology products in 30 separate categories (see full list below)

 

  • 2015 BBS Global Market Report: provides detailed information about industry trends, major projects being planned, products being evaluated for purchase, current and future plant infrastructure, broadcast technology budgets, and planned deployment of new technologies including 4K, HEVC compression, and IP-based technology infrastructure

 

For additional information on the 2015 BBS report, please email us.

As is Devoncroft’s custom, we will publish selected highlights from this year’s BBS reports on the Devoncroft website.  These articles are posted on a semi-regular basis, so please check back often.

To receive posts when published, please enter register with your email in the box in the upper right-hand corner of the page.

The tables below list the  technology vendor brands and product categories covered in the 2015 BBS.

 

All Brands Covered in 2015 Big Broadcast Survey (BBS)


Product Categories Covered in the 2015 Big Broadcast Survey

Technology Products & Vendor Brands Covered in the 2015 BBS, by Application Area

 

Acquisition & Production:

Camera Lenses

Angenieux, Canon, Fujinon

 

ENG Cameras

Canon, Hitachi, Ikegami, JVC, Panasonic, Sony

 

Large Format Single Sensor Cameras

ARRI, Blackmagic Design, Canon, Red Digital Cinema, Sony

 

Production Switchers

Blackmagic Design, Broadcast Pix, For-A, Grass Valley, NewTek, Panasonic, Ross Video, Snell, Sony

 

Studio/System Cameras

Grass Valley, Hitachi, Ikegami, JVC, Panasonic, Sony

 

 

Post Production:

 

Graphics & Branding

Adobe, Autodesk, Avid, ChyronHego, Evertz, Grass Valley, Imagine Communications, Orad, Pixel Power, Ross Video, Vizrt

 

Transcoding / Streaming

Dalet/AmberFin, Elemental Technologies, Envivio, Harmonic, Imagine Communications, Telestream

 

Video Editing

Adobe, Apple, Avid, EVS, Grass Valley, Imagine Communications, Sony

 

Infrastructure:

Bonded Cellular

Dejero, LiveU, Teradek, TVU, Vislink

 

Routing Switchers

Blackmagic Design, Evertz, Grass Valley, Imagine Communications, Nevion, Pesa, Ross Video, Snell, Utah Scientific

 

Signal Processing / Interfacing / Modular

Aja Video, Axon, Blackmagic Design, Evertz, For-A, Grass Valley, Imagine Communication, Ross Video, Snell

 

Video Transport

Arris, Aspera, Cisco, Ericsson, Evertz, Harmonic, Imagine Communications, Media Links, Net Insight, Nevion, Riedel, Signiant

 

 

Audio:

Audio Consoles

Avid, Calrec, Lawo, Salzbrenner Stagetec, Solid State Logic (SSL), Soundcraft, Studer, Wheatstone, Yamaha

 

Audio Processing & Monitoring

Adobe, Avid, Dolby, Linear Acoustic, RTW, TSL, Wohler

 

Intercom / Talkback

Clear-Com, Riedel, RTS Intercom Systems, Trilogy

 

Microphones

AKG, Audio-Technica, beyerdynamic, Electro Voice, Marshall Electronics, Neumann, Schoeps, Sennheiser, Shure, Sony

 

Monitors (speakers)

Adam, Avid, Focal, Genelec, JBL, KRK Systems, Mackie, Neumann, PMC,

 

 

Storage:

High Performance Shared Storage:

Avid, Harmonic, HP, IBM, Isilon Systems/EMC, NetApp, Quantum

 

Playout / Transmission Servers

Avid, EVS, Grass Valley, Harmonic, Imagine Communications, Ross Video

 

Production Servers

Avid, EVS, Grass Valley, Harmonic, Quantel

 

 

System Automation and Control:

Broadcast Business Management Systems

arvato/S4M, Imagine Communications, MediageniX, MSA Focus, SintecMedia/Pilat Media, VSN, Wide Orbit

 

Archive & Archive Management

ASG/Atempo, Masstech, Oracle/Front Porch Digital, Quantum, SGL, XenData

 

Playout Automation

Grass Valley, Imagine Communications, Pebble Beach, Playbox, Snell

 

Workflow / Asset Management

arvato/S4M, Avid, Dalet/Amberfin, EVS, Imagine Communications, Sony, Vizrt, VSN

 

 

Playout and Delivery:

Integrated Playout (Channel in a Box)

Evertz, Grass Valley, Harmonic, Imagine Communications, Pebble Beach, Playbox, Snell, Thomson Video Networks

 

On-line / Streaming Video Delivery Platforms

Brightcove, Kaltura, Ooyala, Piksel

 

Transmission Encoders

Arris, ATEME, Cisco, Elemental Technologies, Envivio, Ericsson, Harmonic, Imagine Communications, Thomson Video Networks

 

Transmitters

GatesAir, Hitachi, NEC, Plisch, Rohde & Schwarz, Screen Service, Toshiba

 

 

Test, Quality Control and Monitoring:

 

Multiviewers

Avitech, Axon, Evertz, For-A, Grass Valley, Imagine Communications

 

Test & Measurement

Imagine Communications, IneoQuest, Leader, Phabrix, Rohde & Schwarz, Tektronix

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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ChyronHego Taken Private by PE Firm, Delisted from NASDAQ

Annual Results, Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Mar 09 2015

ChyronHego LogoVector Capital has completed the previously announced $120m deal to acquire ChyronHego and take it private.

Under the terms of the deal, ChyronHego stockholders will receive $2.82 per share in cash, and ChyronHego common stock has ceased trading on the NASDAQ Stock Exchange.

According the definitive proxy statement, the purchase of ChyronHego will be funded by a combination of equity and debt financing.

Equity financing will be provided by Vector Capital and its affiliates, who have committed to pay approximately $49.3m towards the acquisition, and related expenses.

Debt financing is being provided by Silicon Valley Bank (SVB) and Apollo Investment Corporation (Apollo) in the form of a $50m senior secured five-year term loan, which is expected have interest of “either (i) the Eurodollar Base Rate plus 5.625% (subject to a 1.0% floor with respect to the Eurodollar Base Rate), or (ii) at the Adjusted Base Rate (defined as the highest of (w) 2.75% of (x) the Wall Street Journal Prime Rate and (y) the Federal Funds Rate plus 0.50%) plus 3.875%.”

Separately, SVB and Apollo have also providing a $7m senior secured revolving credit facility that has the same terms as the senior five-year term loan. ChyronHego will use the revolving credit facility for working capital and capital expenditures and other general corporate purposes.

In its last quarter as a public company (Q3 2014), ChyronHego posted a net loss of $2.6m on revenue of $14m.

During the first nine months of 2014, ChryronHego posted a net loss of $2.8m on revenue of $43.3m.

For the trailing twelve months (TTM) ended September 30, 2014, ChyronHego had revenue of $58m, comprised of $27.2m of product revenue and $30.8m of service revenue.

In a securities filing, ChyronHego said it ended 2014 with approximately $5.4m in cash and equivalents; and projected that its revenue for the full year 2014 would be $59m.

“We are delighted to be working with Vector Capital,” said Johan Apel, President and Chief Executive at ChyronHego. “As a private company, ChyronHego will be ideally positioned to reinforce the company’s leadership in news, sports and live production solutions. The Vector team has a strong track record of success in acquiring and operating innovative technology companies, and our partnership with them will enable us to reach new levels of scale, technological capabilities and customer service.”

David Fishman, Managing Director at Vector Capital, who will join ChyronHego’s Board of Directors, said: “We believe that as a private company with Vector’s financial support ChyronHego will be well positioned to capitalize on the significant opportunities in broadcast graphics creation, play-out and real time data visualization. Over time, we are confident the company will be well positioned to capitalize on the exciting trends in the sports, news and live television markets.”

“We welcome ChyronHego to the Vector family,” said Nick Lukens, Vice President at Vector. “We are very excited to roll up our sleeves and get to work with the talented team at ChyronHego. Through our partnership with management, we are committed to strengthening and expanding ChyronHego’s market leading product and service capabilities.”

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Related Content:

Press Release: Vector Capital Completes Acquisition of ChyronHego

Certificate of Merger

ChyronHego Makes Revealing Disclosures About “Going-Private” Transaction

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

ChyronHego 8-K: Additional Disclosures Regarding Vector Transactions

ChyronHego: Definitive Proxy Statement on Vector Take-Private Transaction

ChyronHego Investor Presentation March 2014

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 – 2015. All Rights Reserved.

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ChyronHego Makes Revealing Disclosures About “Going-Private” Transaction

Analysis, Annual Results, Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Feb 27 2015

ChyronHego_Logo

In November 2014 broadcast graphics specialist ChyronHego entered into a definitive agreement to be taken private by Vector Capital in an all-cash deal that valued ChyronHego at an equity value of approximately $114m, or $2.82 per share.

Shortly thereafter, six lawsuits challenging the proposed acquisition of the company were filed in the Supreme Court of the State of New York, which were subsequently consolidated into a single case.

The consolidated case alleges that the company’s directors “breached their fiduciary obligations in connection with their approval of the Merger Agreement by entering into a transaction that is coercive and constitutes an unfair and inequitable subversion of shareholders’ rights, and that the entity defendants aided and abetted those breaches.”

ChyronHego and Vector Capital recently entered into a memorandum of understanding (MOU) with respect to a proposed settlement of case, and agreed to provide more information relating to the proposed deal to take ChyronHego private.

According to a recent filing with securities regulators, ChyronHego has now disclosed additional information regarding the proposed deal, including the following:

  • Beginning in November 2013, ChyronHego’s board authorized ChyronHego’s President and Chief Executive Officer Johan Apel to explore ChyronHego’s strategic alternatives

 

  • ChyronHego and Vector Capital entered into a confidentiality agreement in February 2014

 

  • Discussions on the potential of ChryonHego’s management rolling over equity as part of the transaction did not occur with certain other interested parties.

 

  • During a Special Committee (consisting of Independent ChyronHego Directors) meeting in July 2014, the Company’s bankers were informed “Mr. Apel was not happy being the Chief Executive Officer of a publicly traded company.”

 

  • During the “go-shop period,” ChyronHego executives met with two interested parties, neither of which decided to make an offer

 

  • Additional information was provided on the valuation metrics used in the Company’s analysis of the purchase price offered by Vector.

 

 

Excerpts from ChyronHego Definitive Proxy Statement

The broader proxy statement is a lengthy read covering the historical events leading to the proposed transaction, ChyronHego’s rationale for entering the transaction, and additional information on the perspective of the board and management.

Several excerpts are worth highlighting:

  • Since November 2014, ChyronHego’s investment bankers contacted 85 potential buyers: 20 strategic buyers and 65 private equity buyers. Only nine potential buyers entered into confidentiality agreements to review more detailed materials.  None submitted bids for ChyronHego

 

  • In considering the merger, ChyronHego’s board noted the “significant increase in competition in competition in the broadcast graphics creation, playout and real-time data visualization industry over the past two years, which had led in some instances to pricing pressure and discounting on ChyronHego’s products and services, and consistent competition for clients and customers with other companies, such as Vizrt, that were increasingly well-capitalized.”

 

  • The board had concerns on ChyronHego’s access to capital as a small, public company. “Members of the Board believed, based on their experience with the capital markets, that issuers with small market capitalizations and insignificant levels of coverage by investment analysts generally have a more difficult time raising meaningful amounts capital on terms that are not punitively dilutive to their shareholders.”

 

  • ChyronHego provided the following financial projections to Vector Capital:

 

ChyronHego Projections to Vector

 

  • Financing for the transaction will include a rollover of existing management shares in an aggregate value of $23.3 million, an equity contribution by Vector Capital of $49.3 million, a $50 million senior secured loan, and an up to $7 million of senior secured revolving credit loan.

 

 

Thoughts on Transaction

Taken together the disclosures outline a lengthy and thorough process run by ChyronHego’s board and management to seek a buyer or other strategic alternative for the company.

On the question of valuation, the market has spoken.  As a reference, the transaction values ChyronHego at 19.2X LTM (last twelve months) EBITDA and 1.8x LTM revenue. A review of the public disclosures referenced above offers sensible statements by the board and management on concerns of access to greater resources, competitive positioning, and disadvantages of remaining public.

However, shareholder frustration is understandable given the proposed take-private price per share is lower than the 52-week high stock price.

Moreover, the company had previously communicated growth levels and market sizing estimates inconsistent with observable data points in the broadcast technology sector.

For example, the chart below is from ChyronHego’s March 2014 investor presentation, which was still on the company’s website at the time of writing, implies that company believes its addressable market is more than $1 billion.

 

ChyronHego TAM Estimate from 3-14 Investor Presentation

 

On ChyronHego’s Q2 2014 earnings call, CEO Johan Apel confirmed management’s view that the total addressable market was approximately $1 billion, comprised of $250m of broadcast graphics products, and $750m of services. This reiterated estimates made by previous management about the company’s addressable market on its Q2 2008, Q4 2011, and Q2 2012 earnings calls.

However, it is reasonable to conclude ChyronHego was in the process of communicating updated expectations of growth and market sizing.  To their credit, management had already reversed ground and communicated the need to seek other approaches to generate increased in shareholder value.  This led to a series of M&A transactions responsible for substantial all of ChyronHego’s recent growth.

Shareholders will vote on the proposed take-private deal at a special meeting of the company, which is scheduled to be held on March 6, 2015.

In the third quarter of 2014, ChyronHego posted a net loss of $2.6m on revenue of $14m. During the first nine months of 2014, ChryronHego posted a net loss of $2.8m on revenue of $43.3m.  For the trailing twelve months (TTM) ended September 30, 2014, ChyronHego had revenue of $58m, comprised of $27.2m of product revenue and $30.8m of service revenue

Assuming the transaction closes, it will be interesting to track developments of ChyronHego with its new owners Vector Capital.

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Related Content:

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

ChyronHego 8-K: Additional Disclosures Regarding Vector Transactions

ChyronHego: Definitive Proxy Statement on Vector Take-Private Transaction

ChyronHego Investor Presentation March 2014

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 – 2015. All Rights Reserved.

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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 $14m. 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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ChyronHego Posts First Profit in Three Years in Q2 2014

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 13 2014

Broadcast graphics specialist ChyronHego announced that its revenue for the second quarter of 2014 was $14.7m, an increase of 37% versus the year earlier period, and an increase of 16% compared to the previous quarter.

The company said it experienced year-over-year growth in all geographies with the exception of Asia.

The $4m year-over-year revenue increase was substantially accounted for by the contribution of last year’s acquisition of Hego AB.  The Q2 2013 period only included the results of operations for Hego and its subsidiaries after May 22, 2013, the closing date of the transaction.

Q2 2014 net income was $2.9m or $0.08 per share.  This represents the first quarter of profitability for the company since Q2 2011.  During the same period a year ago, the company posted a net loss of $2.1m, or $(0.09) per share.

It is important to note Q2 2014 benefited from a favorable $2.2 million mark-to-market adjustment of the company’s contingent liability stemming from last year’s Hego acquisition.  Excluding this adjustment, the ChyronHego’s net income would have been $0.8 million for the quarter.

We are very excited to show our first profitable quarter since quarter two 2011,” said company CEO Johan Apel. “Our efforts in both keeping cost under control and driving revenue growth are bearing fruit. We are expecting the growth in revenues to continue for the coming quarters. We are in terms of revenues ahead of our plan both in the U.S. and the Europe, and we have a positive outlook regarding development of these markets.”

Gross margins in the quarter were 62%, down from 68.4% a year ago. The company attributed its margin compression to an increase in lower margin service revenue, which accounted for $7.06m, or 48% of total revenue during the quarter, up from 37% of total revenue in Q2 2013.

During the quarter, ChyronHego closed on the acquisition of ZXY Sports Tracking announced at NAB.  The Company also indicated the WeatherOne acquisition, also announced at NAB, closed on July 1 of this year.

On the company’s conference call with equity analysts, Dougherty & Co analyst Steve Frankel asked Apel about ChyronHego’s addressable market size.  The figures cited by Apel were from a report published in 2011, which has since been substantially updated.  Therefore, it stands to reason the company’s addressable market may change once the updated market sizing values from the recently released IABM DC Global Market Valuation Report are reviewed by ChyronHego’s management team.  This will be an interesting subject to track in future investor messaging from the company.

The conversation with analysts also provided additional context on ChryonHego’s recent $50 million share shelf offering.  Responding from a related questions from Marty Elbaum of Horizon Networks, Apel said, “We have filed a shelf to be ready to be able to pull the trigger if the market conditions are right and if there are business reasons for us to raise money. So that said, trying to make sure that there are no people out there really scared of the huge dilution just around the corner. That is not our intention. We are just trying to make sure that we have all the legalities in place to be able to – if there is a need, raise money for acquisition purposes and so forth.”

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Related Content:

Press Release: ChyronHego Reports Profit for the Second Quarter 2014

Previous Year: Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

ChyronHego S3 Filing: – Prospectus for $50 million of Common Stock

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron – Hego Stock Purchase Agreement

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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2014 Big Broadcast Survey (BBS) Reports Now Available

broadcast industry technology trends, broadcast technology market research, Broadcast Vendor Brand Research, market research, Top Broadcast Vendor Brands | Posted by Joe Zaller
Jul 15 2014

After months of data collection, analysis, and visualization, we have now completed work on the 2014 Big Broadcast Survey (BBS). Reports from this study have now been published and are available from Devoncroft Partners.

If you’re not familiar with the BBS, it’s the most comprehensive annual study of technology end-users in the global broadcast industry. Nearly 10,000 broadcast professionals in 100+ countries participated in the 2014 BBS, making it once again the largest market study of the broadcast industry.

BBS reports have been designed to help readers improve their strategic decision-making, customer engagement, marketing strategy, product planning, and sales execution.  BBS reports are also used frequently for M&A-related activities by both buyers and sellers.

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Three types of 2014 BBS reports are available:

  • 2014 BBS Global Brand Reports:  provides deep insight into how each more than 100 broadcast technology suppliers (see full list below) are perceived by market participants, along with comprehensive benchmarking of broadcast technology vendors on a wide variety of metrics.

 

  • 2014 BBS Product Reports:  provide detailed information from buyers, specifiers, and users of broadcast technology products in 31 separate categories (see full list below)

 

  • 2014 BBS Global Market Report: provides detailed information about industry trends, major projects being planned, products being evaluated for purchase, current and future plant infrastructure, broadcast technology CapEx budgets, and planned deployment of new technologies including 4K, Connected TV, and Social TV.

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If you would like information about these reports and how they can help your business, please get in touch.

 

In addition to these paid-for reports, we will also be publishing highlights from the 2014 BBS on the Devoncroft website.  These articles will be posted on a semi-regular basis, so please check back often.

To receive posts when they are published, just enter your email in the box in the upper right-hand corner of the page.

 

The tables below show the product categories and broadcast technology vendor brands covered in the 2014 BBS.

 

 Product Categories Covered in the 2014 BBS:

2014 BBS -- Product Categories Covered in the 2014 Big Broadcast Survey

 

 

Broadcast Technology Brands Covered in the 2014 BBS:

 

2014 BBS -- All Brands included in 2014 BBS

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.© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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ChyronHego CEO to Step Down at End of 2013

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 04 2013

Michael Wellesley-Wesley, who has served as CEO of Chyron (now ChyronHego) for the past 10 years, will retire at the end of 2013, when his current employment agreement expires.  He will remain on the company’s board of directors.

Wellesley-Wesley will be replaced as CEO by current ChyronHego president Johan Apel, who was the chairman and CEO of Hego AB prior to Chyron’s merger with Hego earlier this year.

“The recent completion of the combination of Chyron and Hego unites two pioneering companies to create a global leader in broadcast graphics creation, playout and real-time data visualization,” said Wellesley-Wesley. “This is a truly transformative leap forward, and it presents an appropriate opportunity to define an orderly succession whereby the leadership responsibilities for the combined company transfer to Johan Apel. Johan is superbly well qualified to develop and execute the vision, the strategies and operating concepts for ChyronHego in ways that will allow us to simultaneously address the evolving needs of customers and the expectations of our shareholders.”

According to his most recent employment contract, Wellesley-Wesley receives a base salary of $482,850 per year, as well as incentive bonus.

Wellesley-Wesley is also eligible for bonus payments under Chyron’s 2013 Management Incentive Compensation Plan, which is triggered if the company achieves certain GAAP revenue and budgeted non-GAAP cash flow targets. According to this plan Wellesley-Wesley is eligible to receive up to 70% of his base salary, or $337,995, if both targets are met at the 100% level.  If these targets are exceeded, by 25% or more the payout will increase by an additional 50 percent.

In August 2013, the company disclosed that during the first half of fiscal 2013, excluding the results of operations for Hego, which was acquired on May 22, 2013, Chyron achieved 106% of the target first half of 2013 GAAP-basis revenues objective and achieved 366% of the target first half of 2013 non-GAAP cash flow objective.  As a result, Wellesley-Wesley “earned an incentive compensation award of $221,231, of which the company remitted payroll withholding taxes on his behalf of $91,191 and paid him the balance of $130,040 in company common stock, based on the August 6, 2013 closing market price of $1.59 per share, resulting in the issuance of 81,786 shares.”

At that same time, Chyron terminated the 2013 Management Incentive Compensation Plan, and published a new management incentive compensation plan for the second half of 2013.  This was done to include new executive officers and management and align the interests of all members of management, including certain members of management that became executive officers of the Company upon the consummation of the business combination with Hego during the second quarter of 2013.

The targets for the new plan are also based on “budgeted GAAP-basis revenues for the second half of the fiscal year ending December 31, 2013, and budgeted Non-GAAP cash flows from operating activities for the second half of the fiscal year ending December 31, 2013.

If both targets are achieved, Wellesley-Wesley is eligible for 70% of his base salary, or $168,998 (at 100% achievement of both performance conditions).

Chyron reported a net loss of $2.1m in the second quarter of 2013 on revenue of $10.7m, up 39% versus the same period a year ago, and up 34% versus the previous quarter.

The company’s net loss and operating loss in the second quarter of 2013 were both impacted by transaction costs associated with Chyron’s merger with Hego AB. The company says that when one-time costs,  including Hego merger-related expenses, restructuring costs and a valuation adjustment for contingent consideration related to the Hego merger in second quarter results, it posted net income of $800,000, and an operating profit of $900,000.

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Related Content:

Press Release: Press Release: ChyronHego CEO Michael Wellesley-Wesley to Retire Effective December 31, 2013; Board Selects Johan Apel as Successor

Michael Wellesley-Wesley Employment Agreement with Chyron Corporation

Chyron Corporation: 2013 Management Incentive Compensation Plan

ChyronHego Corporation Second Half of 2013 Management Incentive Compensation Plan

ChyronHego Avoids NASDAQ Delisting as Shareholder Equity Rises After Merger

Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

Chyron – Hego Stock Purchase Agreement

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Michael Wellesley-Wesley Change in Control Agreement – May 23 2013

Michael Wellesley-Wesley Change in Control Agreement – November 19, 2012

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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ChyronHego Avoids NASDAQ Delisting as Shareholder Equity Rises After Merger

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Aug 13 2013

ChyronHego, said in a regulatory filing that the company believes that it has regained compliance with NASDAQ Listing Rule 5450(b)(1)(A), which requires companies listed on the NASDAQ Global Market to maintain a minimum of $10,000,000 in stockholders’ equity.

On August 9, 2013, Chyron received a letter from NASDAQ stating that the Exchange has determined Chyron now complies with the continued listing requirement for shareholders’ equity, subject to the Chyron providing evidence of its compliance upon filing its quarterly report on Form 10-Q for the quarter ended June 30, 2013.

This notification formally puts to rest an issue that Chyron has been dealing with for the past six months.

In March 2013, Chyron received notice of potential delisting from NASDAQ because its stockholder’s equity has fallen below the minimum $10m threshold set by rules of the Exchange.

At that time, Chyron explained that its stockholder’s equity fell below the $10m threshold at the end of 2012 because it took a $19.5m accounting charge against deferred tax assets. Because this allowance reduced the company’s shareholders’ equity by $19.5m, Chyron company ended the year 2012 with shareholders’ equity of about $1.9m, which put it in violation of NASDAQ’s listing requirement.

In accordance with NASDAQ Listing Rules, Chyron had 45 calendar days from the date of the notice to submit to NASDAQ a plan to regain compliance with its listing requirement.

In April 2013 Chyron submitted to NASDAQ its plan to regain compliance with the minimum stockholders’ equity requirement. NASDAQ granted Chyron an extension to regain compliance with the stockholders’ equity requirement until August 15, 2013, by which date the company will be required to file its quarterly report on Form 10-Q for the quarter ended June 30, 2013.

A key factor in Chyron’s plan to regain compliance was the company’s then-proposed merger with Hego, which has now been successfully completed.

Under the terms of the Chyron – Hego Stock Purchase Agreement Chyron paid $1,000 in cash and issued 12,199,431 shares of its common stock to the former Hego stockholders in exchange for all of the issued and outstanding shares of Hego. The issuance of the 12,199,431 shares, at a value of $1.36 per share at the closing of the transaction, resulted in an increase in the Company’s shareholders’ equity of approximately $16.6m.

The company says that as a result of the Hego merger, and following the release of Chyron’s Q2 2013 results, its shareholders’ equity was approximately $17.9m June 30, 2013, comfortable above the minimum threshold set by NASDAQ.

Following the announcement of its Q2 2013 earnings, Chyron filed an 8-K with regulators that disclosing that it has received a letter NASDAQ  stating that once the company files its Form 10-Q for the period ended June 30, 2013, it will officially be compliant with all NASDAQ listing requirements.

In the same filing, Chyron published its management incentive compensation plan for the second half of 2013.  The company says that it terminated its previous 2013 incentive plan and adopted a new plan that include new executive officers and management and aligns the interests of all members of management, including certain members of management that became executive officers of the Company upon the consummation of the business combination with Hego during the second quarter of 2013.

On Chyron’s Q2 2013 earnings call, company CEO Michael Wellesley-Wesley briefly discussed the delisting, saying “As instructed by NASDAQ, we notified the SEC directly and, thus, the NASDAQ indirectly this morning via a current report on Form 8-K that was filed at the SEC before market opened of our compliance with NASDAQ’s minimum shareholders equity requirement and we now consider the matter closed.”

Wellesley-Wesley has long assured shareholders that the company would do whatever it takes to avoid delisting.

On the company’s Q1 2013 earnings call in May 2013 he said: “The bottom line is this – these shares are not going to be delisted. There are all kinds of ways that we can get back in compliance. We’ll make sure that we don’t get delisted.”

With this latest filing, it looks as though Wellesley-Wesley has made good on his promise to ChyronHego shareholders.

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Related Content:

Chyron 8-K Filing: Notice of Renewed Compliance with NASDAQ Listing Rule 5450(b)(1)(A)

Chyron 8-K Filing: Company believes it has regained compliance with NASDAQ’s shareholders’ equity requirement

ChyronHego Corporation: Second Half of 2013 Management Incentive Compensation Plan

Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

Chyron Q2 2013 Earnings Call Transcript

Chyron Revenue Up 2 Percent in Q1 2013, Gives Update on Merger, Layoffs, and Potential NASDAQ Delisting

Chyron Lays Off 20 Employees, Says it will Save $3 Million per Year

Chyron Receives Another Delisting Notice From NASDAQ

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron – Hego Stock Purchase Agreement

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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