TVBE June 2015 Digital Edition

Page 36

36 TVBEurope 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

completed recently.

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

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