Posts Tagged ‘Stephen Bird’

Vitec Group acquires Wooden Camera for Consideration Up to $35 million

Analysis, Broadcast Vendor M&A | Posted by Josh Stinehour
Sep 20 2016

The Vitec Group has acquired Wooden Camera, a provider of camera accessories including baseplates, cages, hand grips, matte boxes, monitor mounts, shoulder rigs, and zip boxes.  deal-logo

Wooden Camera is based in Dallas, Texas and privately owned by its management team, Ryan and Elizabeth Schorman.  Both will remain with business post-acquisition.  Wooden Camera will become part of Vitec’s Broadcast Division.

The press release announcing the acquisitions cites the opportunity to grow Wooden Camera through expanded distribution as part of Vitec’s global sales network.  Also noted in the announcement is the opportunity for Wooden Camera to benefit from Vitec’s manufacturing and product sourcing capabilities.

As part of the acquisition announcement The Vitec Group disclosed portions of Wooden Camera’s recent financial results along with the high-level deal terms.

Wooden Camera generated an unaudited adjusted EBITDA of £1.9 million ($2.5 million) for the 2015 calendar year.   Management indicated Wooden Camera has grown in the year-to-date period of 2016.

The upfront cash consideration is £15.3 million ($20.0 million), which is subject to post-closing adjustments.  The deal also includes a potential earn out representing an additional £11.5 million ($15.0 million) of consideration.  The earn out payments are based on Wooden Camera achieving “demanding” EBITDA targets for the financial periods thru the close of the 2018 calendar year.  The 2018 EBITDA target is $7.3 million (this represents an almost tripling of 2015 EBITDA).   Vitec will finance the transaction using its existing banking facility.

Using the 2015 EBITDA disclosure, the upfront consideration values Wooden Camera at 8.0x 2015 EBITDA (not including the earn-out).  The total consideration has the potential to value Wooden Camera at 17.5x 2015 EBITDA.  Since more than 40 percent of the total potential deal value is in the form of an aggressive earn-out, it is more appropriate to focus on the implied valuation of the upfront consideration.  The multiple of 2016 EBITDA – though unavailable – is likely less since Wooden Camera has continued to grow.

To put these figures in context, The Vitec Group currently trades in the public markets at a valuation of 7.8x trailing twelve month EBITDA and 1.0x trailing twelve months of revenue (on an enterprise value basis).

The press release states “The Board expects the acquisition to be immediately earnings enhancing.”  This statement is then clarified in the notes to the press release as follows, “This statement should not be taken to mean that earnings per share of The Vitec Group plc will necessarily exceed or be lower than historic earnings per share of The Vitec Group plc and no forecast is intended or implied. This refers to earnings before charges associated with acquisition of businesses.”

It is interesting to reflect on the impact of a weaker GBP currency on the transaction pricing.  The “Brexit” referendum of June 23, 2016 precipitated a decline of the GBP versus the US dollar.  A weaker GBP should – on balance – benefit Vitec’s revenue results.  However, it will make expenditures in other currencies more expensive, including the acquisition of a US-based business as is the case with Wooden Camera.  On June 1, 2016 the exchange rate was 1.44 USD / GBP.  The figures in The Vitec Group press release were based on an exchange rate of 1.31 USD / GBP or 9% lower.  Meaning, the acquisition in GBP terms was 9% more expensive because of the recent disruption in the GBP currency.

The Vitec Group often structures its acquisitions with a substantial portion of contingent consideration.  This was also the case in the recent acquisitions of Offhollywood, SmallHD, and Teradek.

Commenting on the acquisition Vitec’s Group Chief Executive Stephen Bird stated, “I am delighted to welcome the Wooden Camera team to Vitec. Wooden Camera’s products are the glue that binds all the building blocks together on a professional camera system.  This leading business complements Vitec’s strategy of providing premium branded broadcast products and services to our customers to capture and share exceptional images. The business has great prospects and we anticipate that it will generate a good return on our investment.”

 

 

Related Content:

Vitec Group Press Release on Wooden Camera Acquisition

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Vitec Group Acquires two Businesses, Grows Broadcast 10% in 1H 2016

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 15 2016

The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, released its results for the first half of 2016.  Vitec Group Logo

Total revenue for 1H 2016 was £171.1 million, an increase of 9.7% versus 1H 2015, and an increase of 5.7% when compared to 2H 2015.  Operating profit was £12.6 million, a decrease of 8.7% versus 1H 2015, and a 41.7% decrease against 2H 2015.  On a constant currency basis, revenue increased 3.1% and operating profit increased 5.2% on a year-over-year basis.

Operating profit declined despite the revenue growth because of non-repeat, high-margin Haigh-Farr antennas contracts in the comparison period (1H 2015) and a greater mix of lower margin broadcast services business during the first six months of 2016.

Operating profit is reported before costs associated with the acquisition of business ($2.7 million during 1H 2016), restructuring (£2.8 million in 1H 2016), and also the £0.7 million gain on sale of The Vitec Group’s manufacturing facility in Bury St Edmunds.  Vitec indicated the restructuring activities initiated in 2015 resulted in savings of £2.5 million in the first six months of the year.

Vitec Acquisitions:

Vitec acquired two businesses in the first half of 2016.  In January Vitec purchased Provak Foto Film Video B.V., a Netherlands distributor partner for cash consideration of £0.9 million.  On April 12, 2016, Vitec’s Broadcast Division acquired Offhollywood Digital for upfront cash consideration of £1.6 million along with contingent compensation of up to $8.0 million (USD) if gross profit targets are met for the periods to December 2018.  Offhollywood Digital provides camera-back modules for RED cameras along with related services.

Vitec often structures its acquisitions with contingent consideration.  During the period Vitec made yet another payment in the amount of £2.8 million on the earn-out related to the 2013 acquisition of Teradek.

Vitec Broadcast Division:

Vitec’s broadcast brands serve various parts of the broadcast industry: Anton/Bauer, Autocue, Autoscript, Bexel, Camera Corps, Haigh-Farr, Litepanels, OConnor, Paralinx, Petrol Bags, Sachtler, SmallHD, Teradek, The Camera Store, and Vinten.

Vitec reports the results of its Broadcast Division separate from its Photographic division. For the first half of 2016, the Broadcast Division represented 60.0% of The Vitec Group’s total sales.  In 1H 2015 and 2H 2015 the Broadcast Division accounted for 60.0% and 59.0%, respectively.

The below slide is taken from the Vitec Group earnings presentation and offers a summary on the key developments with the Broadcast Division in the first half of 2016.

Vitec-slide

The Broadcast Division had revenue of £102.3 million in 1H 2016, an increase of 10.0% versus 1H 2015 (an increase of 4.0% on constant currency basis), and an increase of 6.6% compared to the preceding period, 2H 2015.

In the Company’s release, management noted strength in the US market, which offset a more challenging environment in the EMEA region.

Positive currency benefits from a weaker British pound accounted for 60% of the Broadcast Division’s growth in 1H 2016.  Given the currency volatility stemming from the recent EU referendum in the UK, The Vitec Group expects to realize a net currency benefit in the second half of 2016.  Management indicated the hedges it maintains on the GBP to USD and GBP to EUR exchange rates will also delay part of the impact of a weaker GBP into the 2017 fiscal year.

Product sales for the Broadcast Division were £78.7 million for 1H 2016, an increase of 0.5% over 1H 2015, and a decrease of 4.0% over 2H 2015.  As a percentage of Broadcast Revenue, Products sales accounted for 76.9% of revenue in 1H 2016.  This compares to 84.6% in 1H 2015 and 85.4% during 2H 2015.

Within Product sales management highlighted the increased sales of wireless transmitters and receivers, camera monitors, and mobile power.  The US market was especially strong for broadcast battery products.  These results were offset by a decrease in large camera support sales.

Services sales from Vitec’s Bexel subsidiary were £23.6 million in 1H 2016, an increase of 66.2% versus 1H 2015, and an increase of 62.8% against 2H 2015.  Services represented 23.1% of Broadcast revenue during 1H 2016.  In 1H 2015 Services were 15.4% of sales and during 2H 2015 Services were 15.1% of Broadcast Revenue.

The strong growth in Services was due to a large contract with the NFL for project management and support to upgrade the communication infrastructure for all 31 NFL stadiums. The contract includes the pass-through of low margin products impacting the profitability of the Broadcast Division.

Operating profit for the Broadcast Division in 1H 2016 was £8.5 million, a decrease of 12.4% versus the 1H 2015 result (down 10.0% on constant currency basis), and a decrease of 34.6% against 2H 2015. In addition to the greater concentration with Services, operating profit was also negatively impacted by Vitec’s continued investment in the development of its wireless products and camera monitor business.

Operating margin for the Broadcast Division was 8.3% during the first half of 2016, a decrease of 220 basis points against 1H 2015, and a decrease of 600 basis points compared to 2H 2015.

 

Business Outlook:

Commenting on the first half results and outlook for the full year, Group Chief Executive Stephen Bird offered the following, “The Board’s expectations for the full year are unchanged. We anticipate that the Group’s performance in the second half of the year will benefit from the Rio 2016 Olympics, full year savings from the previously announced restructuring plans, and, potentially, from weaker Sterling.”

 

Related Content:

Press Release: Vitec Group 1H 2016 Results

Presentation: Vitec Group 1H 2016 Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Vitec Group 2015 Growth Driven by M&A Activity

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Feb 29 2016

The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, released its results for 2015.Vitec Group Logo

Total revenue was £317.8 million, an increase of 2.6% versus 2014.  Operating profit was £35.4 million, a decline of 8.8% versus last year.  On a constant currency basis, revenue increased 1.3% and operating profit decreased 1.8%.

In the earnings release, management highlighted the negative impact of currency, the disposal of IMT during 2014, and the softness in comparisons against 2014 given the non-repeat of large events.

Stephen Bird, Group Chief Executive commented, “We have continued to invest additional resources in driving new product sales in line with our strategy. As expected, the full year results reflect the non-repeat of the 2014 Sochi Winter Olympics and FIFA World Cup, and an anticipated negative impact from foreign exchange. There was growth in revenue and operating profit over the prior period excluding these items. The Group is making good progress in streamlining certain activities with lower growth prospects, with some further actions being taken to drive profitable growth.”

Vitec also announced it has sold its main UK Broadcast manufacturing site in Bury St Edmunds.  The proceeds from the sale were £3.9 million.  Vitec is planning to move the business to a smaller leased facility in the same region.  In recent years, Vitec had transitioned a significant amount of its manufacturing to Costa Rica.

 

Vitec Broadcast Division:

Vitec’s Broadcast brands serve various parts of the broadcast industry: Anton/Bauer, Autocue, Autoscript, Bexel, Camera Corps, Teradek, Haigh-Farr, Litepanels, OConnor, Paralinx, Petrol Bags, Sachtler, SmallHD, Vinten and Vinten Radamec.

The Broadcast Division had revenue of £189.0 million in 2015, an increase of 10.5% versus 2014 when excluding the divested IMT’s revenue from 2014 (and up 7.0% on constant currency basis).

Vitec’s acquisitions of Paralinx (February 2015) and SmallHD (December 2014) contributed approximately 75% of the revenue increases over 2014.

Given the positive contribution from companies acquired through M&A actions, Vitec highlighted its acquisition track record in its presentation to investors.

 

Vitec FY Presetnation - highlights M&A

 

Remarking on the Broadcast Division results, CEO Stephen Bird stated, “The Broadcast Division performed satisfactorily in variable market conditions. Our higher technology product businesses are performing well, including further strong growth of our wireless products. This partially offset lower sales of large camera supports, the non-repeat of major sporting events, and investments in the future growth of our higher technology businesses.”

Bird continued, “Broadcast Market continues to show some variability in demand with customers remaining cautious this is impacting large project activity.  The US market has been more positive and Japan is performing well.  However, conditions in EMEA are more challenging.”

Operating profit for the Broadcast Division in2015 was £20.3 million, a decrease of 4.2% versus the 2014 result (down 1.3% on constant currency basis).  Operating profit is stated before restructuring costs and charges associated with acquired businesses.

Restructuring costs for 2015 were predominantly attributable to streamlining activities in the Broadcast Division.

These activities were announced as part of Vitec’s first half earnings release.  Additional streamline actions for the entire company were announced in the year-end earnings release.

In aggregate, one-off costs associated with the continued restructuring are approximately £10 million, an increase from Management’s previous estimate of £6 million.  The restructuring is focused on the UK, US, and Europe operations and will be completed by the end of 2016.

 

 

 

Related Content:

Press Release: The Vitec Group plc 2015 Full Year Results

The Vitec Group plc. Full year results 2015 Presentation

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

Vitec Group Broadcast Revenue Up 6.3 Percent in 2014; Changes Reporting Structure to Focus on Core Businesses

Broadcast Vendor M&A: Vitec Group Buys SmallHD for up to $30 Million in Cash

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Vitec Group Broadcast Revenue Up 6.3 Percent in 2014; Changes Reporting Structure to Focus on Core Businesses

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

The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, announced that its total for the full year 2014 was £309.6m, a decline of 1.8% versus 2013.

Operating profit was £38.8m, a decline of 1.8% versus last year.  On a constant currency basis, however revenue increased 3.3% and operating profit increased 7.4%.

 

Changes to Financial Reporting Structure Reflects Focus on Core Businesses

Vitec has about a dozen brands that serve various parts of the broadcast industry, including Anton/Bauer, Autocue, Autoscript, Bexel, Camera Corps, The Camera Store, Litepanels, OConnor, Petrol Bags, Sachtler, Teradek, SmallHD, Vinten and Vinten Radamec.

During 2014, Vitec divested its IMT wireless communications and microwave business, which included the IMT, Nucomm, and RF Central brands.

Historically, Vitec reported its broadcast-centric activities through its Videocom and Services divisions, but following the sale of IMT, the company has changed its financial reporting structure, starting with the release of its full year 2014 results. Vitec now reports its broadcast revenue through its newly named “Broadcast Division,” which it further breaks out as “Broadcast Equipment” and “Broadcast Services.”

According to the company this new reporting structure more appropriately describes its core operating businesses. “Following our exit from the loss-making IMT business we are focused on our core Broadcast and Photographic markets supplemented with selective value-adding acquisitions,” said Vitec CEO Stephen Bird.

 

Vitec Broadcast Division

As shown in the chart below, Vitec’s Broadcast Division had revenue of £171.1m in 2014, an increase of 6.3% versus 2013 (up 11.9% on constant currency basis).


Vitec Broadcast Division Revenue FY 2014

 

 

2014 Broadcast Division Operating profit for 2014 was £21.1m, an increase of 9.3% versus 2013’s results (16.6% on constant currency basis).  Operating profit for 2014 would have been negatively impacted by £1.8m had IMT’s results been included.

“Our Broadcast Division performed well in a variable market including a strong performance from Teradek, acquired in the second half of 2013,” said Bird. “We also benefited in 2014 from contracts to support the Sochi Winter Olympics and the FIFA World Cup. Our premium product and service offering was further strengthened through the acquisitions of Autocue, the specialty camera assets of SIS, and more recently SmallHD.”

 

 

Broadcast Equipment

The Broadcast Equipment business (excluding IMT) had 2014 revenues of £131.9m, an increase of 1.6% (7.0% on constant currency) versus 2013.

Vitec Broadcast Wquipment and Broadcast Services Revenue FY 2014

 

Vitec made three acquisitions during 2014, which are now reported in the Broadcast Equipment business:

  • The specialty camera assets of SIS Outside Broadcasts Limited (integrated into Vitec’s Camera Corps business)

 

  • Autocue, a well-known provider of teleprompters (now combined with Vitec’s Autoscript business)

 

  • SmallHD, a provider of high definition on-camera field monitors

 

The combination of currency fluctuations, and the inorganic contributions from these acquisitions accounted for all the growth in the Broadcast Equipment business.  On an organic constant currency basis, Broadcast Equipment revenue in 2014 was declined by 2.2% versus the previous year.

Broadcast Equipment operating profit was £18.8m in 2014, an increase of 5.0% (12.3% on a constant currency basis) over 2013.

Operating margin for Broadcast Equipment was 14.3% a slight improvement from the 2013 margin of 13.8%.

The company said that a lower level of investment by studios in larger camera supports had impacted its business, but that this was offset by smaller camera support products performing in line with expectations.

The Anton-Bauer battery business had lower revenue, but is expected to benefit from new ranges of products launched in 2014.

Although Vitec did not specifically break out the performance of Teradek, it did disclose that “contingent consideration of £4.2 million ($7.0 million) was accrued during the year to be paid to the previous owners of Teradek in 2015 in relation to the business’s performance in 2014 and is subject to final agreement. The business has delivered strong growth in the year and has performed ahead of our pre-acquisition expectations.”

Vitec offered Broadcast Division results excluding the performance of the IMT business.  IMT had recorded an operating loss of £1.3m in 2014 on revenue of £7.9 million.  IMT had breakeven results in 2013 on revenue of £14.0m.

 

Broadcast Services

The Broadcast Services generated revenue of £39.2m in 2014, an increase of 26.0% (32.9% on a constant currency basis) versus 2013.  2014 operating profit for Broadcast Services was £2.4m, equating to an operating margin of 6.1%.  This compares favorably to the operating profit of £1.5m in 2013 (4.8% operating margin).

Management attributed the strong performance of the Broadcast Services segment to major events in 2014 including the Sochi Winter Olympics and the FIFA World Cup, along with a rise in the underlying rentals business for other major events. The company also cited participation in a number of improvements in the infrastructure of NFL stadiums including player positioning systems.

It is interesting to review the capital expenditure requirements of the Broadcast Services business.

Broadcast Services spent £12.7m on rental assets in 2014.  This constitutes the majority Vitec’s capital expenditures as a company, which totaled £17.5 million excluding capitalization of software development costs.  Broadcast Services capital expenditures are partially financed by proceeds from the sale of certain rental assets.  These sales amounted to £5m in 2014.  Thus, total net capital expenditures were £6.7m for Broadcast Services.  This £6.7m cash outflow is in the context of a £3.8m operating cash inflow generated by the segment.

There is additional strategic rationale in Broadcast Services, which was noted in the Company’s release. Management stated the Broadcast Services business “enables Vitec to closely monitor changes in technology and to showcase our products.”

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Related Content:

Press Release: The Vitec Group plc, 2014 Full Year Results

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

Broadcast Vendor M&A: Vitec Group Buys SmallHD for up to $30 Million in Cash

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

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

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 04 2013

The Vitec Group said that its total revenue for the first six months of 2013 was £157.6m, a decrease of 10.7% versus the first six months of 2012.

Vitec said that on an organic basis at constant currency, its revenue was down 9% versus the first half of 2012, and that after adjusting for the London Olympics and the disposal of the Staging business the underlying sales run rate was similar to the second half of 2012.

Despite the lower revenue, on an overall basis the company posted an increase in operating profit and profit before tax of 4.8% and 0.6% respectively.

 

Vitec Videocom Division

The company said broadcast-focused Videocomm division performed well in a challenging Broadcast & Video market.

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, 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 2013 revenue from the Videocom division was £70.2m, down 5.1% versus the first six months of 2012, and down 3% versus the previous six month period (July to December 2012).

Videocomm order intake was only modestly behind prior year with sales reflecting the timing of shipments.

Videocom operating profit for the first half of 2013 was £8.7m, an increase of 3.6% versus last year.  The operating margin for the period was 12.4%, up from 11.4% last year.

The company attributed the increased operating margin to cost control measures and the initial benefit of restructuring activities, which it said was progressing well. Restructuring within the Videocom division includes the relocation of certain manufacturing activities to Costa Rica and the streamlining of broadcast and MAG operations in the United States.

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

  • Our camera supports brands (Vinten, Sachtler and O’Connor) continued to trade well. We have grown our sales of robotic products following increased project activity in EMEA and Asia and our Sachtler range of supports continues to show good growth.

 

  • Our Litepanels LED lighting products benefited from growth in the Asian market. We are in the process of broadening the product range to enable us to maintain our leading position in the market.

 

  • Our Anton/Bauer mobile power products experienced a challenging video market but continued to make progress in supplying batteries and chargers to power medical carts in hospitals.

 

  • Camera Corps, acquired in April 2012, is trading in line with expectations although the lack of significant sporting events this year means that we expect a lower level of sales activity. This is in comparison to 2012 where the business benefited from the UEFA Euro 2012 football championships in the first half and the London Olympics in the second half of the year.

 

  • Our MAG sales grew during the first half benefiting from a $5.8 million US Department of Justice award for transmitters and receivers. We continue to bid for significant opportunities, whilst recognizing that the timing of major awards from US Government agencies is difficult to predict.

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Vitec Services Division (Bexel)

For the first half of 2012, revenue from Vitec’s Services Division, which primarily comes from Bexel, was £13.8m, essentially flat with the first six months of 2012.  On an organic and constant currency basis, Bexel revenue declined 3.5% versus the first six months of 2012.

The company said that these results were in line with expectations and that Bexel had made good progress on its strategy of working closely with key customers and supporting projects where the business can add most value.  As the result of this focus, as well as a rationalization of the business structure, the operating profit at Bexel doubled to £200,000 for the first six months of 2012. Bexel’s operating and margins were up by 70 bps to 1.4%.

 

“Vitec CEO Stephen Bird said that the company’s Videocom Division had” performed well in a challenging market and the Division’s MAG results benefited from a $5.8 million contract with the U.S. Department of Justice. The Imaging Division made good progress despite the continuation of the more challenging market that started to impact us in the second half of last year. The Imaging Division continues to grow its market share and this will be supported by new product launches planned for later this year.”

Bird said that Vitec is on target to deliver the significant cost reductions outlined in its 2012 full year results announcement, and that the company will supplement these savings with specific rationalization actions within our Imaging and Services Divisions I order to deliver further attractive returns.

“Our longer-term growth prospects continue to be positive and we are well positioned to benefit from any upturn in our markets,” said Bird. “Our order visibility remains limited but our first half year performance was consistent with our normal phasing and we are on track to meet our full year expectations.”

 

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Related Content:

Press Release: The Vitec Group plc Half Year Results to 30 June 2013

Vitec Group 1H 2013 Earnings Presentation

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

Vitec Group Says 2013 Trading In-line with Expectations, Videocom Markets Remain Challenging

Vitec Group 2012 Annual Report (published March 2013)

Previous Year: Vitec Group 1H 2012 Results: Videocom Revenue Up 12.3 Percent, Bexel Down 2.1 Percent

Vitec 2012 Results: Videocom Revenue Up 7.3 Percent, Bexel Doubles Operating Profit as Revenue Increases 4.4 Percent

Previous Interim Statement: Vitec Group Says Trading In-line with Expectations Despite Challenging Macroeconomic Environment

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© Devoncroft Partners. All Rights Reserved.

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

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Aug 29 2013

Vitec announced that it has agreed to acquire bonded cellular technology provider Teradek for an initial payment of $15m, and up to an additional $15m based on Teradek’s future profitability.

Teradek is being acquired from its current management who will remain with the business, and will operate the company as an autonomous business unit within Vitec’s Videocom division.

Teradek had 2012 sales of sales of $10.4m and generated an unaudited adjusted profit before tax of $1.6m. Vitec says Teradeck experienced strong growth during 2013 year to date that further profitable growth is anticipated.

Under the terms of the deal, Vitec initially will pay $14.9m, comprised of $11.5m in cash, $2m worth of Vitec ordinary shares to be held in escrow for two years post-completion, and $1.4m that will be paid to certain key employees in cash over a two-year period after completion.

Vitec will pay up to a further $15.5m dependent on the future profitability of Teradek. This will reflect performance against annual EBIT targets over the three-year period to 31 December 2015. The maximum payment would be achieved if Teradek delivers these targets including an EBIT of $9 in 2015. Of the deferred consideration, 10% will be payable to certain key employees in cash. The remaining 90% will be payable to the sellers. Up to a third of any deferred consideration paid to the sellers may be satisfied by issuing new Vitec ordinary shares, depending on the level of performance, with the remainder paid in cash. The recipients of these shares are required to hold them for a certain period under the terms of this acquisition.

There is a growing demand for the supply of wirelessly transmitted images and Teradek is a world leader in the provision of this technology,” said Vitec CEO Stephen Bird. “We believe that we can continue to grow this business and generate a good return on this investment.”

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Vitec Group 1H 2012 Results: Videocom Revenue Up 12.3 Percent, Bexel Down 2.1 Percent

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 22 2012

The Vitec Group said that its total revenue for the first six months of 2102 was £176.5m, an increase of 2.7% versus the first six months of 2011, and up 0.7% on an organic basis.

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, 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 2012 revenue from the Videocom division was £74m, up 12.3% versus the first six months of 2011, and up 5% versus the previous six month period (July to December 2011). These results include a contribution from Haigh-Farr, which was acquired in December 2011, as well as a contribution from Camera Corps, which was acquired in April 2012. On an organic and constant currency basis (excluding Haigh-Farr and Camera Corps), Videocom revenue was up 2.9% versus the first six months of 2011.

Videocom operating profit for the first half of 2012 was £8.4m, an increase of 40% versus last year.  The operating margin for the period was 11.4%, up from 9.1% last year.

The company said that it experienced strong demand in the first half of 2012, particularly in Asia, and it continues to benefit from the increasing number of cameras being sold as a result of the more diverse use of video capture, investments by broadcasters and technological drivers including HD, LED lighting and robotics.

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

  • Camera support (Vinten, Sachtler and OConnor) had good growth in both the studio and on-location production segments, particularly in Asia where there was an increase in project-based spending

 

  • Litepanels made further progress in the LED light market as customers continue move to energy efficient and environmentally friendly LED lights, especially in the US.

 

  • Anton/Bauer continued to perform well in its traditional Broadcast and Film markets. It made good progress in the medical carts market where it grew sales of batteries and chargers

 

  • IMT increased its sales of wireless products into the broadcast market in the first half of the year

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Bexel 

For the first half of 2012, revenue from Bexel was £13.9m, down 2.1% versus the first six months of 2011.  On an organic and constant currency basis, Bexel revenue declined 4.1% versus the first six months of 2011.

Bexel’s operating profit was £100,000, up from zero last year.  Bexels’ operating margin was 0.7%

The company attributed the decline in Bexel’s top line to its new focus on larger projects,  and the rationalization of its business structure.  The company said that Bexel will benefit in the second half of the year from its involvement in the 2012 Olympics.

 

Guidance

Vitec said that although the macroeconomic environment remains uncertain and its order book visibility is limited, the company’s expectations for the full year remain unchanged. For the full year 2011, Vitec posted  a pre-tax profit of £33m on revenue of £351m.  At that time the company said it expected progress in 2012, but did not offer a more detailed outlook.

 

“Vitec CEO Stephen Bird said that the company performed well in the first half of the year with an increase in profitability and improvement in margins across all of divisions.  “Our core Broadcast business achieved an encouraging sales performance across the product range.” he said.

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Related Content:

Press Release: The Vitec Group PLC – Half Yearly Report http://dcft.co/Oxsf2S

Vitec Group 2012 Annual General Meeting Presentation  http://dcft.co/TVLK7v

More Broadcast Vendor M&A: Vitec Plc Disposes of Loss-Making Staging Businesses

Vitec Group Says 2012 Trading In Line with Expectations http://dcft.co/JtB6Px

More Broadcast Vendor M&A: Vitec Group Acquires Camera Corps for £8 Million

Vitec 2011 Results: Videocom Up 12 Percent, Bexel Down 7.9 Percent Versus 2010

Previous Year: Vitec Says Videocom Increases 8.7 Percent, Bexel Declines 22.8 Percent During First Six Months of 2011

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More Broadcast Vendor M&A: Vitec Plc Disposes of Loss-Making Staging Businesses

Broadcast Vendor M&A | Posted by Joe Zaller
Aug 14 2012

UK-based Vitec Plc, which owns a dozen companies in the broadcast industry, announced that it has sold its collection of loss-making staging business via two separate transactions.

Vitec said that the staging business, which supply standard aluminum trusses and custom stage sets, were a non-core assets. 

In 2011 these businesses incurred an operating loss before significant items of £700,000 on revenue of £17.7m.  At the end of 2011 the gross assets of the staging businesses was £9.1m.

Vitec appears to have received no money for these businesses, and in fact said that as part of the deal it will record an estimated net cash outflow of £2.1m after transaction costs.

Under the terms of the two deals:

  • MILOS S.R.O., based in the Czech Republic, has purchased the majority of the staging business that consists of: Tomcat USA Inc, Tomcat Global Corp., Tomcat de Mexico SA de CV, Staging Systems Europe SpA and Staging SK S.R.O. These companies are based in the US, Mexico, Italy, and Slovakia.

 

  • Prolyte Products UK Limited purchased the remaining Staging business, Brilliant Stages Limited, which is based in the UK.

 

 “We are pleased to have secured the sale of our Staging business to two leading staging and truss manufacturers,” said Vitec CEO Stephen Bird. “The disposal will enable us to focus on our core markets and our strategic objective of providing products and services that support the capture of exceptional images.”

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Related Content:

Press Release: The Vitec Group plc – Sale of Staging Businesses

Vitec Group Says 2012 Trading In Line with Expectations

More Broadcast Vendor M&A: Vitec Group Acquires Camera Corps for £8 Million

Vitec 2011 Results: Videocom Up 12 Percent, Bexel Down 7.9 Percent Versus 2010

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© Devoncroft Partners. All Rights Reserved.

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More Broadcast Vendor M&A: Vitec Group Acquires Camera Corps for £8 Million

Broadcast Vendor M&A | Posted by Joe Zaller
Apr 12 2012

Vitec Group has acquired the entire share capital of Camera Corps Limited for approximately £8m.  Vitec said it financed the deal via existing banking facilities. Camera Corps will operate within Vitec’s Videocom Division and its existing senior management, including the founder, Laurie Frost, will remain with the business.   

UK-based Camera Corps provides specialty remote camera systems, tracking, support systems and full service facilities to broadcasters.

Vitec company Bexel is an existing distributor of Camera Corps Q-Ball camera system.

According to Vitec CEO Stephen Bird “the acquisition is in line with our strategy of helping our customers capture exceptional images. There is a growing appetite among consumers for more unusual and interesting camera angles and Camera Corps is a world leader in helping broadcasters capture these moments.”

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Related Content:

Vitec Press Release: ACQUISITION OF CAMERA CORPS

Vitec 2011 Results: Videocom Up 12 Percent, Bexel Down 7.9 Percent Versus 2010

Vitec 2011 Investor Presentation

Vitec 2011 Annual Report

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© Devoncroft Partners. All Rights Reserved.

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Vitec Says Videocom Increases 8.7 Percent, Bexel Declines 22.8 Percent During First Six Months of 2011

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 16 2011

UK-based Vitec Plc, which owns a dozen companies in the broadcast industry, announced its financial results for the first six months of 2011.

The company operates in several markets, including broadcast, photographic and government / military.  This post looks only at those that relate to the broadcast industry – the company’s “Videocom” and “Services” divisions.

Vitec’s Videocom division is comprised of a dozen brands that serve various parts of the broadcast industry: Anton/Bauer, Autoscript, The Camera Store, Litepanels, Microwave Service Company, Nucomm, OConnor, Petrol Bags, RF Central, Sachtler, Vinten and Vinten Radamec.

The company’s Services division is composed solely of broadcast rental & services provider Bexel.

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Videocom Revenue Up, Driven by Success in Russia, the Middle East and Asia

For the first half of 2011 Vitec’s Videocom revenue was £65.9, an increase of 8.7% versus the first six months of 2010. After subtracting a £5.3m contribution from Clear-Com, which was sold to HME in April 2010, organic sales growth at constant exchange rates increased by 22.8%, with double digit sales growth in all business units in the division.

Operating profit for the first six months of 2011 was £6m, an increase of 62.2% versus last year, and an increase of 42.5% in organic terms at constant exchange rates.

Operating margins for first half of the year were 9.1%, an improvement of 3% versus last year, or an improvement of 1.2% in organic terms at constant exchange rates.

The company said its broadcast business grew, particularly in Russia, the Middle East and Asia. However, Vitec’s broadcast sales and rentals in the US market were less buoyant due to “uncertainties over the economy.”

Camera support brands (Vinten, Sachtler and O’Connor) “enjoyed good growth in both the studio and on-location production segments”, driven by capital expenditure projects in the Middle East and Asia.

Robotics (Vinten Radamec) had several strategic wins during the period, including Sky Sports News and France 3.

Vitec said its Litepanels business had strong growth during the period, driven by an increasing number of customers changing from  conventional tungsten lights to new energy and environmentally efficient LED lights especially in the US.

Battery specials Anton/Bauer experienced steady growth in its traditional broadcast and film markets, especially in EMEA, and is “making good progress in identifying and addressing opportunities for the supply of batteries and chargers in the medical market.”

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Services Division — Bexel

Vitec said that revenue at Bexel was £14.2m during the first half of 2011m a drop of 22.8% versus last year (when it reported strong revenues from the Vancouver Olympics). Bexel’s operating profit ropped by £200,000 to break-even.

Significant Bexel contracts during the first half of 2011 include projects for Endemol, Fremantle and ESPN.

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Company CEO Stephen Bird said: “These results confirm that our strategy and its execution in 2011 are on track, which together with continued strengthening of our businesses in the Broadcast and Video and Photographic markets, have enabled us to grow the revenue and operating profits strongly in the first half. Our core Broadcast business has achieved an encouraging sales performance particularly into Russia, the Middle East and Asia.”

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Related Content:

Press Release: The Vitec Group – Half Year Results to 30 June 2011

Vitec First Half 2011 Investor Presentation

Vitec Interim Management Statement, May 2011

Vitec 2010 Full Year results presentation

Vitec Announces 2010 Results: VideoCom Revenue Falls, Services Post Strong Increase

Previous Year: Vitec Plc Reports 1H 2010 Results — Videocom Revenue Down 18%, Bexel Revenue up 45%

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