RNS Number : 7154M
The Vitec Group PLC
29 August 2013
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
The Vitec Group plc
29 August 2013
ACQUISITION OF TERADEK
The Vitec Group plc (Vitec), the international provider of products and services for the broadcast, photographic, and MAG (military, aerospace and government) markets, announces that it has agreed to acquire Teradek, LLC (Teradek). Teradek is a world leading provider of wireless video devices and platforms that are used by broadcasters, businesses and web channels to wirelessly transmit images. Completion is expected imminently.
Based in Irvine, California, Teradeks products are used in live electronic news gathering, real-time monitoring and recording, aerial visual capture and webcasting. All the products are designed and manufactured in the USA and are sold internationally.
There is a growing demand for wirelessly transmitted images and Teradek is a world leader in this market. The acquisition will strengthen Vitecs product offering particularly to the growing number of independent videographers and business users. It will complement Vitecs existing video activities including its range of broadcast microwave systems and there is significant scope for Teradeks products to be sold through Vitecs global sales and distributor network. Teradek will operate as an autonomous business unit within Vitecs Videocom division.
For the financial year-ended 31 December 2012, Teradek had sales of $10.4 million (£6.7 million) and generated an unaudited adjusted profit before tax of $1.6 million (£1.0 million). The business has grown strongly during 2013 year to date and we anticipate further profitable growth going forward. As at 31 December 2012, Teradek had adjusted gross assets of $2.9 million (£1.9 million).
Under the terms of the acquisition, the initial estimated consideration is $14.9 million (£9.6 million). This comprises: (i) $11.5 million to be paid in cash on completion; (ii) $2.0 million of Vitec ordinary shares to be held in escrow for two years post-completion; and (iii) $1.4 million to be paid to certain key employees in cash over a two year period after completion. The cash consideration is subject to post-completion adjustments for changes in working capital. Teradek will be acquired on a debt/cash free basis.
To satisfy its obligation to deposit $2.0 million of its ordinary shares in escrow, Vitec will issue (conditionally upon admission) 214,847 ordinary shares in the capital of the Company (the Consideration Shares). Application will be made for the Consideration Shares to be admitted to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange. It is expected that admission of the Consideration Shares will be effective on 3 September 2013. The Consideration Shares will be issued as fully paid and will rank pari passu in all respects with the existing issued share capital of the Company.
Up to a further $15.5 million (£9.9 million) is payable 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 $9.0 million in 2015. Of the deferred consideration, 10% will be payable to certain key employees in cash. The remaining 90% will be payable to the sellers. Up to a third of any deferred consideration paid to the sellers may be satisfied by issuing new Vitec ordinary shares, depending on the level of performance, with the remainder paid in cash. The recipients of these shares are required to hold them for a certain period under the terms of this acquisition. The business is being acquired from its current Management who will remain with the business.
The cash consideration will be financed out of Vitecs existing finance facilities. The Board expects the acquisition to be immediately earnings enhancing (before charges associated with acquired businesses - See note 1).
Stephen Bird, Vitecs Group Chief Executive, commented on the acquisition:
I am delighted to welcome the Teradek team to Vitec. The business complements our market leading broadcast activities and is in line with our strategy of helping our customers capture exceptional images.
There is a growing demand for the supply of wirelessly transmitted images and Teradek is a world leader in the provision of this technology. We believe that we can continue to grow this business and generate a good return on this investment.
Enquiries:
The Vitec Group plc
Stephen Bird, Group Chief Executive
Paul Hayes, Group Finance Director
Telephone: 020 8332 4600
FTI Consulting
Nick Hasell / Susanne Yule
Telephone: 020 7269 7291
Notes:
1. This statement should not be taken to mean that earnings per share of The Vitec Group plc will necessarily exceed or be lower than historic earnings per share of The Vitec Group plc and no forecast is intended or implied.
2. The US$ values quoted in this announcement are also shown in £s by converting the US$ values at an exchange rate of £1 = $1.56.
3. Vitec is an international Group principally serving customers in the Broadcast & Video, Photographic and MAG markets. Listed on the London Stock Exchange with 2012 revenue of £345.3 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 and MAG.
Imaging designs, manufactures and distributes equipment and accessories for photography and video.
Servi
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RNS Number : 7154M
