Posts Tagged ‘Nordic Capital’

Vizrt Posts 16% Revenue Growth in 2014, Provides Update on Pending $374 Million “Going Private” Deal

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Feb 26 2015

Broadcast graphics MAM specialist Vizrt reported strong results for the fourth quarter and full year 2014.

The company also provided an update on the pending $374 million all-cash deal with Nordic Capital to take the company private.

For the fourth quarter of 2014 revenue was $36.2 million, an increase of 9% versus the fourth quarter in 2013, and an increase of 2.8% versus the preceding quarter, Q3 2014.

Gross margins for Q4 2014 were 71%, which compares favorably to the 69% margins recorded during Q4 2013 and is consistent with the 71% gross margins from the preceding quarter.

Operating expenses for the quarter were $17.9 million.  This represents a 9% increase when compared to the fourth quarter of 2013 and is flat versus the preceding quarter.

  • R&D expenses in the quarter were $5.5m (15.1% of revenue), down 1% versus the same period ago, and down 4% versus the previous quarter

 

  • Sales and marketing expenses in the quarter were $8.5m (23.6% of revenue), up 7% against the year earlier period and down 5% versus the Q3 2014

 

  • General and administrative expenses in the quarter were $3.8m (10.7% of revenue), up 31% versus the same period a year ago, and up 18% versus the preceding quarter

 

EBITDA was $7.8 million for the quarter, up 357% from $1.7 million during the fourth quarter of 2013, and up 9% from $7.2 million in the previous quarter.  The EBITDA margin for the quarter was 22% versus an EBITDA margin of 5% during the comparable quarter last year and 21% during the third quarter of 2014.

Net profit for the quarter was $4.5 million, compared to a net loss of $3.4 million last year, and down slightly versus last quarter’s net profit of $5.2 million.

 

Product line results for the Quarter:

  • Broadcast Graphics (BG) accounted for $30.8 million during the quarter (85% of total revenue versus 86.7% last quarter), an increase of 6% versus the same period ago, and an increase of 1% versus the previous quarter. The BG order backlog was $35.6 million, comparable to the size observed at the same time last year, and down 3.6% versus the previous quarter.

 

  • Media Asset Management (MAM) revenue in the quarter was $5.66 million (18% of total revenue versus 16% last quarter), up 5% versus the same period a year ago, and up 35% versus last quarter.   The MAM order backlog was $14.6 million, up 37% versus last year, and up 5% versus last quarter

 

Geographic Performance for the Quarter:

  • Revenue from EMEA was $17.1 million (47.2% of total revenue versus 47.5% last quarter), up 25% versus the same period last year and up 2% versus last quarter

 

  • Americas revenue was $8.9 million (24.8% of total revenue versus 27.6% last quarter), down 14% versus last year, and down 13% versus last quarter.

 

  • APAC revenue was $10.1 million (27.9% of total revenue versus 23.2% last quarter), up 9% versus last year, and up 3% versus last quarter

 

Results for full year 2014:

The full year results were headlined by growth of 31% in EBITDA and 80% in cash flow from operations.

Vizrt’s 2014 revenue was $141.5 million, an increase of 16% versus the $122.4 million recorded during 2013.

Net profit for the 2014 was $15.5 million ($0.23 per share), which is considerably higher than the $3.6 million ($0.06 per share) net profit from 2013.  The attributed its improved profitability to a change in product mix, consistent financial prudence, and the acquisition of Mosart MediaLabs

Gross margins for 2014 were 70%, which was a slight improvement from the 68% margins from 2013.    EBITDA was $27.7m (20% operating margin) for the full year 2014, a significant year-over-year increase from the $15.5 million (13% operating margin) recorded during 2013.

Operating expenses for 2014 were $71.1 million, a 14% increase over the operating expense level of 2013.

  • R&D expenses for the full year were $22.5 million (31.6% of revenue), an increase of 18% versus 2013

 

  • Sales and marketing expenses for 2014 were $35.2 million (49.6% of revenue), up 9% against the sales and marketing expense from 2013

 

  • General and administrative expenses were $13.3 million (18.8% of revenue), up 23% versus the 2013 calendar year

 

The geographic breakdown of 2014 sales consisted of 26% from Americas, 48% from EMEA, and 26% from APAC.

Vizrt ended 2014 with 584 employees compared to 542 at the end of Q4 2013. 24 employees were added following the Mosart acquisition in Q1 2014.

 

 

Update on Pending Acquisition by Nordic Capital

Company management provided an update on its previously announced acquisition by Nordic Capital.  Final closing of the transaction remains subject to certain conditions including the decision of Israeli tax authorities regarding a tax withholding ruling. Vizrt believes the process will come to a positive conclusion in the next several weeks.  The acquisition was first announced on November 10, 2014 and approved by a majority of shareholders on December 18, 2014.

 

 

 

Business Outlook:

Martin Burkhalter, Vizrt’s CEO, stated: “Our strong performance continued in Q4, despite the fact that we did not see the discretional spending towards the year-end that we normally have witnessed in previous years. Our strong performance is also reflected in our solid backlog going forward. I am particular pleased with the improvement of MAM results and the MAM backlog which increased by 37% compared to the same time last year.”

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Related Content:

Press Release: Vizrt Reports Q4 and 2014 Results

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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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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