www.tvbeurope.com June 2015
Feature: NAB Retrospective
Ghosts in the machine Mergers and acquisitions at NAB Show 2015, by Russell Grute, director at Broadcast Innovation
Who’s zooming who? Which of the recent mergers or acquisitions actually create and deliver a better value proposition for paying customers? Does a boost in vendor investment, a merger or a change of
n my ﬁrst 20 years in the industry, I believed
owner actually beneﬁt them?
that plus or minus a bit of smoke and
Mergers and acquisitions (M&A) activity
mirrors, smart broadcast and media
continued apace after last year’s upturn; a
customers could successfully evaluate the
valuable chance to pause and review the
leading innovators to make well informed
impact of last year’s activities, too. The IABM cites
buying decisions. Sellers sold and buyers bought.
annual market size for the media technology
Wouldn’t it be great if it were as simple as that?
industry at about US$40 billion for the sectors that
But there are others amongst us. Investors.
it addresses. The huge overlap with the IT industry
Whilst it’s customers’ investment in vendors’
and new cloud services makes that number
technology and services that pays for the whole
potentially much larger. Gartner recently cited
show, the whole industry in fact, they are not
25 per cent growth in “the emerging and
always only dealing with the vendors. Many
disruptive software deﬁned video” sector at
developers and manufactures rely on suitable
US$10 billion by 2018. It’s interesting when you
external investment to get their businesses to the
look beyond the numbers.
next level. ‘Suitable’ for whom? Appropriate investment is more important than ever to support the simultaneously converging and diverging media technology industry. As UHD promises to explode our eyeballs and ‘TV Everywhere’ is getting closer to ﬁnding the advertising-everywhere money, never have so many business models been so disrupted. Investors, advisors, ﬁnanciers, private equity and venture
‘The group versus micro brand and segment reach is one of the biggest challenges in successful M&A; everyone has an opinion and the perceived connections between brands are often highly intangible’
capitalists are new spirits amongst us at NAB, haunting the show ﬂoor searching for opportunity. Some highlights: last year we saw M&A action
of the most proﬁtable companies on the show
fast with many overlapping cycles in play.
from Belden (Grass Valley), Dalet (Amberﬁn) and
ﬂoor is also because we’re also one of the least
Technology innovation in, say, managed services
Vislink (Pebble Beach Systems). Later on in the
well known. They know our brands, they know
and SaaS at one end, versus the unprecedented
year, Ericsson completed its acquisition of Red
the businesses that we bought, but they don’t
changes in audience behaviour at the other,
Bee Media and Nordic Capital AS announced
really see us – and that’s very intentional.” The
requires huge investment to innovate and deliver.
its intention to acquire trendsetters Vizrt, which
group versus micro brand and segment reach
is one of the biggest challenges in successful
Our media-meshed industry is now running
Investors are searching for something to give a ﬁnancial return that suits their current appetite for risk
Serial acquirer, Oracle, made one of its most
M&A; everyone has an opinion and the
and reward. Many developers and manufactures
media-centric purchases to date when it
perceived connections between brands are
come to NAB actively seeking backing, too: new
bought highly respected archive innovator
often highly intangible.
funding to get their idea off the ground or to boost
Front Porch Digital. Many customers saw this
their next phase of innovation or expansion. For
being as much about high quality people.
ChyronHego was ﬁnally taken private in a
vendors who have gained recent new ﬁnancing,
We’ll look at that aspect next month in part two
merger: I think. No space for the details here but,
the challenge is to swing into action and get their
of this feature: Peoplesoft.
if you really want to study the real challenges
Highly respected live graphics specialist
Vitec Videocom, one of the industry’s most
of governance, communications and value
active acquirers, recently bought Paralinx for
engineering in precision M&A, it’s well worth
window at NAB: selling their latest solutions to
its real-time wireless monitoring and in October
reading up on ChyronHego.
prospective customers whist also promoting
last year, completed its purchase of Autocue.
their company’s innovation and potential value
CEO Matt Danilowicz got my attention with this
for an all share deal worth about $60 million, on
to the investment community. It’s a very tricky
statement: “M&A is easy. Integrating companies,
a turnover of about $40 million. A low valuation
balancing act for vendors.
that’s really hard. The reason that Vitec is still one
perhaps, given Orad’s cash position and its
latest value proposition front and centre. For many vendors, it’s now a two-way shop
Less interestingly so far, Avid acquired Orad