Clear-Com is a subsidiary of Poway, CA based HM Electronics (“HME”). Trilogy is headquartered in Andover, Hampshire UK and had been owned by the Foresight Group, a UK based infrastructure and private equity investment manager.
In its 2015 annual report, Foresight had indicated Trilogy was pursuing strategic options including a possible sale.
Based on Foresight’s disclosure, the acquisition price for Trilogy is GBP 2.9 million. According to its regulatory filings, Trilogy’s revenue for the trailing twelve months ending February 2016 was GBP 3.26 million. Using these figures the transaction values Trilogy at a 0.9x multiple of annual revenue. When HME purchased Clear-Com from the Vitec Group in 2010, the valuation was 0.4x annual sales.
Trilogy’s revenue declined (in GBP terms) 23% in the twelve months ending February 26, 2016. This was preceded by revenue decreases in 2013 and 2012 (2014 showed slight growth). In aggregate, annual sales decreased 62% between the fiscal year ending February 2012 and the most recent fiscal year ending February 2016.
Trilogy’s profitability was impacted by the decline in sales. EBITDA loss was GBP 762,000 for the fiscal year ending February 2014 and GBP 509,000 for the fiscal year ending February 2015.
Foresight’s financial reports provide additional context on the declining performance of Trilogy. The principal cause cited for the revenue declines since 2012 were delays in US Defense orders. The broadcast division of Trilogy was cited as facing a difficult trading environment in each of 2014 and 2015.
In the press release announcing the acquisition, Mitzi Dominguez, CEO of Clear-Com stated, “Both companies have been serving the professional intercom business for decades and bring a wealth of industry knowledge to the marketplace. The efforts of our combined teams will deliver tremendous added value to customers all over the world and will create new business opportunities for both companies. We extend a warm welcome to all Trilogy employees and customers.”
Bob Boster, President of Clear-Com, added some context on the technology alignment of the businesses. “Their specialized matrix solutions perfectly complement Clear-Com’s highly-programmable and scalable digital matrix portfolio, increasing each team’s capabilities to meet the ever-growing and vastly-diverse communication needs across the markets we serve. Trilogy’s SPG solutions will also be well received by our broadcast customers globally” said Mr. Boster.
Press release: Clear-Com Acquisition of Trilogy Communications
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