The Vitec Group PLC Acquisition (4492Z)
11 December 2014 - 6:00PM
UK Regulatory
TIDMVTC
RNS Number : 4492Z
The Vitec Group PLC
11 December 2014
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IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD
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JURISDICTION.
The Vitec Group plc
11 December 2014
ACQUISITION OF SMALLHD
The Vitec Group plc ("Vitec"), the international provider of
products and services for Broadcast & Video and Photographic
markets, announces that it has acquired the business of SmallHD.
SmallHD is a leading provider of high-quality, high-definition
on-camera field monitors used by broadcasters and independent
content creators.
Based in North Carolina, USA, SmallHD has pioneered the design
and manufacture of rugged and future-proof monitors to support the
significant increase of independent filmmakers and videographers
who require high-quality, high-performing solutions. SmallHD's
products are manufactured in the USA and are designed around the
demands of the growing global community of independent content
creators.
The acquisition is in line with Vitec's strategy of offering a
growing range of high technology solutions to the Group's
established global customer base. It complements Vitec's existing
video activities, including Teradek, which serves a similar
customer base. There are opportunities to sell SmallHD's products
through Vitec's global sales and distributor network. SmallHD is
being acquired from its current management, who will remain with
the business, and it will operate as a business unit within the
Videocom Division.
For the financial year-ended 31 December 2013, SmallHD had sales
of $8.1 million (GBP5.2 million) and generated an unaudited
adjusted profit before tax of $0.3 million (GBP0.2 million). The
business has grown during 2014 and is investing in new product
platforms. As a result, we anticipate both healthy sales and profit
growth going forward. As at 31 December 2013, SmallHD had gross
assets of $2.5 million (GBP1.6 million).
Under the terms of the acquisition, the initial estimated cash
consideration is $4.6million (GBP2.9 million) on a debt/cash free
basis. This is subject to certain post-completion adjustments for
changes in net assets.
Up to a further $25.4 million (GBP16.3 million) is payable in
cash dependent on the future profitability of SmallHD. This will
reflect performance against demanding EBITDA targets over a two and
a half year period to 30 June 2017. The maximum payment would be
achieved if SmallHD delivers these targets with an annualised
EBITDA run-rate of $9.0 million in 2017.
The consideration will be financed out of Vitec's existing
banking facilities. The Board expects the acquisition to be
earnings enhancing(1) (before charges associated with acquired
businesses) in the year ending 31 December 2015.
Stephen Bird, Vitec's Group Chief Executive, commented on the
acquisition:
"I am delighted to welcome the SmallHD team to Vitec. This high
technology business complements our market-leading broadcast
activities and is in line with our strategy of enabling our
customers to capture and share exceptional images.
There is an increasing demand for SmallHD's products from the
growing community of independent content creators who use this
world leading technology. The business has great prospects and we
anticipate that it will generate a good return on our
investment."
Enquiries:
The Vitec Group plc
Stephen Bird, Group Chief Executive
Paul Hayes, Group Finance Director
Telephone: 020 8332 4600
FTI Consulting
Nick Hasell / Susanne Yule
Telephone: 020 3727 1340
Notes:
1. This statement should not be taken to mean that earnings per
share of The Vitec Group plc will necessarily exceed or be lower
than historic earnings per share of The Vitec Group plc and no
forecast is intended or implied.
2. The US$ values quoted in this announcement are also shown in
GBPs by converting the US$ values at an exchange rate of $/GBP of
1.56.
3. Vitec is an international Group principally serving customers
in the Broadcast & Video and Photographic markets. Listed on
the London Stock Exchange with 2013 revenue of GBP315.4 million,
Vitec is based on strong, well known, premium brands on which its
customers worldwide rely. Vitec is organised in three Divisions:
Videocom, Imaging and Services.
Videocom designs and distributes systems and products used in
broadcasting and live entertainment, film and video production.
Imaging designs, manufactures and distributes equipment and
accessories for photography and video.
Services provides equipment rental, workflow design and
technical support to TV production teams and film crews.
The Group has now made seven acquisitions in the last four years
and continues to review further value adding additions to the
Group's activities.
More information can be found at: www.vitecgroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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