Posts Tagged ‘Michael Rosenberg’

Broadcast Vendor M&A: SintecMedia to Acquire Pilat Media for £63.3 million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Jan 17 2014

In a move that further would concentrate the broadcast business management (aka traffic & billing) market, SintecMedia and Pilat Media have announced the terms of a recommended proposal whereby SintecMedia will acquire Pilat.

Under the terms of the proposed deal, SintecMedia plans to acquire the shares of Pilat that it does not already own in an all cash deal that values Pilat at £63.3 million ($103.5m).

PE firm Riverwood Capital Management, which owns SintecMedia, will provide 49% of the financing, with the remainder funded from the existing resources of the SintecMedia Group, including (to the extent required) pursuant to a pre-existing debt facility made available to SintecMedia by Bank Leumi.

SintecMedia says its strategic plan for the Pilat business is “to gradually integrate certain functions where appropriate to realize synergies and economies of scale; but as both companies face growing demand for their products and services and, given their backlogs of work, this is unlikely to affect the vast majority of positions and staff across the two companies.”

 

Second Attempt at Merger Between SintecMedia and Pilat Media

This is not the first time that Sintec and Pilat have flirted with combining the companies.

In 2009, SintecMedia mounted a similar bid to takeover of Pilat Media, but was unable to gain the required approval of 75% of Pilat’s shareholders.

The 2009 deal valued Pilat Media at £16.3m, or about 25% of the offer currently on the table.

Once again, the newly announced deal must achieve approval from 75% of Pilat Media’s shareholders.

However, this time around the companies should have an easier time gaining this approval than they did during the time of the attempted 2009 merger.

The proposed deal already has the buy-in from Shaul Elovitch whose Eurocom Group owns 23.9% of Pilat Media, and SintecMedia already owns a further 22.7% of Pilat as a result of the attempted 2009 merger and through continued accumulation of the company’s shares.

Remaining Pilat Media shareholders with a 400% reward for their patience since rejecting SintecMedia’s 2009 overtures.  They will also be paid in cash, something pointed out by SintecMedia CEO, Amotz Yarden, who said the proposed deal represents a “substantial premium” to Pilat’s recent share value, and “the boards of SintecMedia and SMS believe that, given the economic uncertainty and market pressures facing the industry, this represents a very good opportunity for Pilat Shareholders to realize their investment in cash today.”

 

 

Third M&A Deal for SintecMedia Since Riverwood-backed Management Buyout

If the deal gains shareholder approval, it will be the third acquisition by SintecMedia since it was purchased in 2011 by PE firm Riverwood Capital Management for approximately $110m.

Sintec acquired StorerTV in January 2013, and then acquired Argo Systems a few weeks later, in an effort to bolster Sintec’s presence in the North America Market.

Whereas StoreTV and Argo Systems were relatively small deals, the tie-up with Pilat Media is a much larger and arguably transformative deal for the company, and potentially has wider ramifications in the broadcast industry as well.

By acquiring Pilat Media, Sintec will likely become one of the largest players in the broadcast business management software market, and will almost certainly be the biggest traffic & billing vendor outside of the United States where Harris Broadcast and WideOrbit are the two leading vendors.

Not only will the Pilat acquisition make SintecMedia a major player in traffic & billing, it will also transform the company into one of the larger pure-play software vendors in the broadcast space.  Both companies have more than 300 employees and a broad range of blue chip customers around the world.

 

Deal Recommended by Both Sides

Acceptance of the proposed transaction has been recommended by the boards of both companies, who said in a statement that “the management of SintecMedia and Pilat have together agreed the approach for organizing and managing the enlarged group harmoniously, leveraging the relative strengths of each organization.”

For its part, Sintec says it “attaches great importance to the skills, experience and knowledge of the existing employees of the Pilat Group, who have contributed to the success of the business to date and believes that they will benefit from enhanced career and business opportunities within the Enlarged Group,” and that “in conducting any rationalization, SintecMedia intends that the employees of the Pilat and SintecMedia groups will have equal opportunity.”

Sintec has also given assurances to the Pilat Directors that the existing employment rights (including pension and severance rights) of all Pilat Group employees will be fully safeguarded, there will be no changes in the conditions of their employment, and that SintecMedia has no any intention to change the locations of Pilat’s places of business or to re-deploy its fixed assets.

 

Management of Enlarged Company

When/if the deal closes, the board of the enlarged group will be comprised solely of existing SintecMedia directors, and the directors of Pilat Media will resign from the Pilat Board.

At that time, Pilat Media’s CEO and CFO, Avi Engel and Martin Blair, will also resign as employees of Pilat Media. Both Engel Blair will provide handover support as part of their notice period for up to one month following their resignation, and will then be released from their employment, and paid in lieu of the balance of their contractual notice period. Engel and Blair have each agreed to provide up to 15 days of additional handover assistance within the first 12 month period after the deal closes, and Engle will also enter into a consultancy agreement with SintecMedia on terms yet to be agreed.

Pilat’s Remuneration Committee has agreed to pay Engel £300,000 and Blair £40,000 respectively in recognition of their roles in effecting the acquisition. Pilat Media chairman, Michael Rosenberg, will receive £60,000 for his role in the deal.

The companies said that they expect the deal to close towards the end of Q1 2014.

When the deal closes Pilat will then be wholly owned by Sintec, and Pilat shares, which are currently traded on the AIM and TASE exchanges, will be cancelled.

 

Pilat Media’s had revenue of £23.48m for the full year 2012.  Revenue through the third quarter of 2013 was £18.69m, up 18.4% versus the same period in 2012.

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Related Content:

Proposed acquisition of Pilat Media Global plc (“Pilat”) by SintecMedia Ltd.

SintecMedia Limited 2009 Offer for Pilat Media Global

Broadcast Vendor M&A: SintecMedia Acquires Argo Systems

Broadcast Vendor M&A: SintecMedia Acquires StorerTV

Press Release: Taldan Capital Leads $110 million the Buyout of SintecMedia

Riverwood Capital Portfolio Companies – SintecMedia

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Pilat Media Posts Loss in Q3 2012 as Revenues Decline 3 Percent, Says Q4 Will be “Strong and Profitable”

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Dec 06 2012

Broadcast business management solutions provider Pilat Media announced that its revenue for the third quarter of 2012 was £5.32m, down 3.6% versus the same period a year ago, and down 2% versus the previous quarter. The company said the lower results were in line with its expectations and is due to the fact that much of its resources during the quarter we focused on upgrading clients to its newest generation system rather than generating new business.

Q3 revenue included £568,000 of licensing revenue for sales to both new and existing clients.  This is an increase of 14% versus the same period a year ago, and a decline of 18% versus the previous quarter.   Revenue from implementation services in Q3 was £3.4m, down 4% versus last year and essentially flat with the previous quarter.

On a geographic basis, the company’s revenue for the quarter was split out as follows:

UK:

13.4%

USA:

18.6%

Canada:

19.0%

Australia:

14.5%

Other:

34.5%

 

The net loss for the quarter was £59,000, compared to a net profit of £306,000 last year.  Operating profit in the quarter was £90,000, down from £240,000 last year.

Recurring maintenance and support fees from live clients was £1.35m down 9% versus last year. The company attributed the decline in maintenance income to the termination of its contract with FOX Television Stations Inc. In Q1 of this year, Pilat said it expects its maintenance revenues to increase in 2013, after the current projects it is implementing go live at customer sites.

Gross margins in the quarter were 48.9% versus 49.4% last year, and 49.2% last quarter.  The company attributed its declining margins to it ongoing upgrade projects at various customers, and said that its revenue mix will improve in Q4 driving higher margins in the quarter and helping the company’s margins for the full year 2012 to be on par with 2011.

R&D costs in the quarter were £1.01m, up 45% versus the same period a year ago, and up 30% versus last quarter.  The company said it is now spending “significantly: more on R&D as it invests in the development of its investment into the new IBMS:Rights and IBMS:Adapt modules.

General and administrative costs in the quarter were £1,06m down 38% versus last year and down 2% versus the previous quarter.  The company said the lower year-over-year G&A costs reflect its continuing efforts to reduce administrative overheads despite increasing the numbers of development and revenue generating staff.

Year-to-date Results:

Revenue for the first nine months of 2012 was £15.78m, down 4% versus the same period in 2012. There were two “material customers” during the period who accounted for more than 5% of revenue – one at 11.7% (£1.85m), and one at 5.3% (£836,000).

On a geographic basis, the company’s year-to-date revenue was split out as follows:

UK: 9.6%
USA: 22.2%
Canada: 19.3%
Australia: 16.6%
Other: 34.3%

 

The loss for the first nine months of 2012 was £133,000, and improvement on the loss of £1.325m for the first nine months of 2012.  The YTD operating profit was £680,000, down from an operating profit of £1.29m last year.

 

Outlook:

Pilat says that it expects to complete the license renewal negotiations with a number of its existing clients within “the next few weeks,” which it says will generate license fees in Q4 making it a strong and profitable quarter.

Company chairman Michael Rosenberg said: “The pipeline of new sales opportunities continues to include significant prospects that can convert in the next few months. The Board hopes the increased investment in expanding Pilat Media’s offering, with the Rights and Adapt modules, IBMS-Express and OTTilus will help in generating additional prospects and revenues in the Group’s existing market and in new ones the Company can now approach, leveraging its strong position. As the cash balance continues to increase the Company will intensify its search for ways to utilize cash to build value for the shareholders.”

 

 

Related Content

Press Release: Pilat Media — Results for the nine months ended 30 September 2012

Previous Quarter: Pilat Media Revenue Declines 7 Percent in Q2 2012

Previous Year: Pilat Media Announce Q3 2011 Results, Says Dispute With Fox Has Been Settled

Pilat Media and Fox Television Stations Settle Legal Dispute

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Pilat Media Posts Loss in 2011 as a Result of Lawsuit with Fox Television Stations

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 28 2012

Broadcast business management solutions provider Pilat Media announced that its revenue for the full year 2011 was £22.5m, up 3% versus 2010. However, Pilat’s profitability was impacted by the legal fight with Fox Television Stations (FTS) during the year.

Pilat and FTS settled their legal dispute in November of 2011, with Pilat receiving £544,000 from Fox. However, because FTS discontinued the use of Pilat’s software, the company had to write down £2.3m of receivables that would have otherwise been paid by Fox. As a result, Pilat had a loss from operations £900,000 versus a profit of £2.2m in 2010.

Pilat’s 2011 revenue was boosted by higher margin revenue stream such as license and maintenance fees which grew by 7% and 5.6% respectively.  Revenues from professional services, were £13.7m, of 61% of total revenue in 2011 versus 62% in 2010. Significantly, recurring revenue from software maintenance fees represented 26% of the total revenue in 2011, an increase of 5.5% versus 2010.

Gross margins for the year were 51.1%, a decrease of 5.7% versus 2010.  The company attributed the margin compression to staff and training costs associated with bringing new customers online.  The company also said its G&A costs increased during the year (20% of revenue) because of a number of one-off expenses including additional legal fees related to the FTS litigation.

The company said it is strongly positioned for the future and that it expects support and maintenance revenues to continue to grow over in the future as more customer projects are completed. However this growth will be moderated by 5% due the loss of maintenance revenue from FTS.

Commenting on the results, Michael Rosenberg, Chairman of Pilat Media Global plc, said: “We are pleased that revenues increased to their highest ever level despite the uncertainty in the market that causes some projects to be delayed. The revenue backlog and sales pipeline remain healthy.  The Company is involved in a number of sales opportunities that we are hopeful will be concluded successfully in the Company’s favor in the next few months.”

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Related Content

Press Release: Pilat Media Global PLC 2011 Results

Pilat Media Announce Q3 2011 Results, Says Dispute With Fox Has Been Settled http://dcft.co/H17Alx

Pilat Media and Fox Television Stations Settle Legal Dispute

Pilat Media Posts 1H 2011 Loss Due to Fox TV Stations Lawsuit

Pilat Media Sued by Fox Television Stations, Files Counter Claim for Breach of Contract

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© Devoncroft Partners. All Rights Reserved.

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Pilat Media Announce Q3 2011 Results, Says Dispute With Fox Has Been Settled

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Dec 05 2011

Broadcast business management solutions provider Pilat Media reported that its revenue for the third quarter of 2011 was £5.51m, up 5.1% versus the same period a year ago.

The company posted a profit of £244,000 for the quarter, versus a loss of £53,000 during the third quarter of 2010.

Significantly, the company said it had recovered the £544,000 impairment charge it had taken as a result of litigation with Fox Television Stations (FTS).  The company also said it will be receiving a payment from FTS.

 

Year-to-date results

Revenue for the first nine months of 2011 was £16.4m, up 4.4% versus the same period in 2010.  Year-to-date gross profit was £1.29m down 8% compared to the first nine months of 2010.  After tax, the company posted a year-to-date loss of £1.33m versus a profit of £398,000 for the first nine months of 2010.

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Pilat Chairman Michael Rosenberg issued an upbeat statement saying “We are pleased to have announced the settlement of our dispute with Fox Television Stations Inc with the result that the Company will now be receiving a payment from them.  Our Q3 revenues continued to grow on the back of increased demand from our existing client base, bringing the growth over the last nine months to over 4%.  We continue to make significant investment in improving and expanding our products and this in part has enabled revenues from our existing clients to increase.  We are also engaged with a number of new potential projects but these are moving forward at a slower pace than we had envisaged and this will inevitably restrict growth for this year.“

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Related Content:

Press Release: Pilat Media Reports Results for the nine months ended 30 September 2011

Pilat Media and Fox Television Stations Settle Legal Dispute

Pilat Media Posts 1H 2011 Loss Due to Fox TV Stations Lawsuit

Pilat Media Sued by Fox Television Stations, Files Counter Claim for Breach of Contract

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Pilat Media Posts 1H 2011 Loss Due to Fox TV Stations Lawsuit

broadcast technology market research | Posted by Joe Zaller
Aug 31 2011

Pilat Media announced that its revenue for the first six months of 2011 was £10.84m, an increase of 4% versus last year. Operating profit for the first half of 2011 was £1.05m, a decline of 25% versus last year.

The company also announced that it has taken an impairment charge of £2.82m for the lawsuit filed by Fox TV Stations.  Taking this charge into account, the company says it posted a loss of £1.7m during the first half of the year.

Pilat chairman Michael Rosenberg said: “Operationally, the second quarter’s results were in line with our expectations. We were disappointed with FOX TV Station’s Inc. (“FTS”) actions and are taking appropriate measures to deal with their allegations, which we believe have no substance. The results reflect our decision to provide for the sum of approximately £2.8 million carried in our balance sheet as an accrual for sums due from FTS pending clarification of the outcome of this situation.”

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Related Content:

Press Release: Pilat Media Announces Results for the Six Months Ended 30 June 2011

Pilat Media Sued by Fox Television Stations, Files Counter Claim for Breach of Contract

Press Release: Pilat Media Informed by Fox Television Stations of Breach of Contract Suit

Pilat Media Posts Small Loss for First Quarter of 2011

Press Release: Pilat Media Announces Results for the 12 Months Ended December 31 2010

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Pilat Media Posts Small Loss for First Quarter of 2011

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jun 02 2011

Broadcast business management solution provider Pilat Media said that it posted an after tax loss £189,000 versus an after tax profit of £289,000 during the same period a year ago.  Revenue in the first quarter was £5.05m, an increase of 3.5% versus the first quarter of 2010.

On a geographic basis, revenue in Australia tripled to £1.2m versus last year, while sales declined in the UK, USA and Canada.

Pilat chairman Michael Rosenberg issued a cautiously optimistic statement, saying   “After such a strong year in 2010 it was pleasing to see further revenue growth in Q1. We are continuing to see increased demand from our existing client base stimulated by the new version 6 of IBMS and our investment in new modules. These modules also open up new sales opportunities. Cash continues to grow strongly and whilst the quarter shows a small loss we remain confident that 2011 will show continued overall growth in revenues and profits.”

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Related Content:

Press Release: Pilat Media Results for the three months ended 31 March 2011

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