Vitec Buy Amimon For USD55 Million, Expect Material 2018 Profit Growth

LONDON (Alliance News) - Vitec Group PLC said Friday it acquired chipsets maker Amimon Inc for ...

Alliance News 9 November, 2018 | 9:34AM
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LONDON (Alliance News) - Vitec Group PLC said Friday it acquired chipsets maker Amimon Inc for USD55.0 million in cash, whilst also reporting it continued to trade well with material 2018 profit growth expected.

Vitec - which makes photography and video products such as autocues and camera supports -bought wireless video transmission chipsets maker Amimon for USD55.0 million or GBP42.3 million in cash. Including employee retention and acquisition costs, Vitec expects to invest USD59.9 million or GBP46.1 million in the buy.

For 2017, Amimon generated an operating loss of USD700,000 on revenue of USD18.6 million.

Over the same period, Vitec generated GBP30.2 million in operating profit on GBP353.3 million revenue. Pretax profit stood at GBP27.4 million.

Vitec Chief Executive Officer Stephen Bird explained the firm was the "natural home" for Amimon and was "delighted" to welcome the team - including co-founder and Chief Technology Officer Zvi Reznic - to Vitec.

"Amimon is the technology of choice for wireless equipment used in the cine market", Bird added. "This acquisition opens up the exciting opportunity for Vitec to drive growth by taking wireless technology into adjacent markets, developing innovative new products to give our customers greater flexibility in image capture and content creation."

Vitec and Amimon have had a customer-supplier relationship since 2012.

"We know the business well, use their technology in our market-leading Teradek and SmallHD products, and we are uniquely placed to access cost synergies through integration with our existing capabilities," Bird continued. "As well as accelerating the group's stated objective to achieve mid-teen operating margins, the acquisition is expected to enhance earnings per share from 2019."

Turning to current trading at Vitec, the company confirmed its 2018 forecasts remained "unchanged." The firm continues to expect "material" earnings per share growth combined with "good" cash generation.

This is after its imaging solutions unit - especially its Joby and Lowepro brands - had improved their market share with a "more favourable product mix." This was despite the launch of new cameras from Japanese firms Canon and Nikon having "subdued" near-term demand.

The production solutions business was continuing to generate a "strong" performance.

Meanwhile, the creative solutions division was expected to see SmallHD production reach full production "shortly" after completing its move to a new facility later in November. The firm is expected to see insurance cover continue to mitigate the losses incurred after a fire at an adjacent building disrupted SmallHD production.

Shares in Vitec were flat at 1,235.00 pence on Friday.

By Ahren Lester; ahrenlester@alliancenews.com

Copyright 2018 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Vitec Group (The) PLC 1,325.00 GBX 3.11 -
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