22nd Aug 2008 07:00
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.
22 August 2008
For immediate release
Acquisition of the Litepanels LED lighting business
The Vitec Group plc ("Vitec") announces that it has today signed an agreement to acquire the business and assets of Litepanels, Inc and of Litepanels, LLC (together "Litepanels" or "the Business"), the leading manufacturer of light-emitting diode (LED)-based lights for the television, broadcast, video and film industries. The initial consideration of US$14.5m (£7.8m), will be paid in cash from existing resources, with additional deferred consideration dependent on future profitability.
Litepanels has developed an innovative range of LED on-camera and stand-mounted lighting systems, backed by a strong patent portfolio, that have gained considerable acceptance with lighting and broadcast professionals in the last few years, resulting in Litepanels being seen as a market leader in the media lighting industry. The products created by the Business, which have won various awards, are used both on-location and in studio environments, including installations at the White House press briefing room. LED lighting is attractive, particularly in studio and film set applications, because of its low power consumption and low heat generation compared to traditional light sources, and is expected to continue to grow rapidly as lighting directors convert to this technology.
Litepanels, based in North Hollywood, California, was founded in 2005 by five partners with extensive experience as lighting designers or lighting directors, all of whom will stay with the company post-closing. Litepanels will report as part of Vitec's Broadcast Systems division.
Financial performance
Litepanels had audited revenue and adjusted profit before tax in the year ended 31 December 2007 of $5.8m (£2.9m) and $1.3m (£0.65m) respectively. Unaudited revenue for the six months to 30 June 2008 was $5.0m (£2.7m). Gross assets at acquisition are expected to be $2.0m (£1.1m) with $13.6m (£7.3m) of goodwill, acquisition costs and other intangibles.
The acquisition is expected (pre amortisation of intangibles, stock adjustments or any one-off costs) to be earnings-enhancing in the financial year ending 31 December 2009 (see note 4).
Summary terms
The potential earnout payments are contingent on annual operating profit performance in the calendar years 2008 to 2011. The maximum total earnout payment for 2008 to 2011 is $50.0m (£26.7m). Earnout payments will be payable principally in cash, to be satisfied from existing resources. Up to 35% of the 2010 and 2011 earnout payments can, at Vitec's discretion, be satisfied in Vitec shares with any such shares subject to an 18 month lock up period.
The sale and purchase agreement contains usual representations and warranties. Closing is expected to take place by the end of August 2008.
Gareth Rhys Williams, Chief Executive of Vitec, said:
"I am delighted to announce this acquisition. Litepanels is a fast-growing business with an impressive patent portfolio of exciting products that are sold to our existing customer base. The team at Litepanels has successfully brought to market a range of easy-to-use products that are much more comfortable for the newscasters and actors to work with, and which dramatically reduce the energy required, both to operate the lights and to subsequently air-condition the studios. Vitec already has a significant position in the lighting stand market, and sells on-camera lights through its existing broadcast channels; we look forward to working with the team at Litepanels to help develop the Business in the future, leveraging off the strength of Vitec's worldwide distribution."
Ends
Enquiries:
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The Vitec Group plc |
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Gareth Rhys Williams / Alastair Hewgill |
Telephone: 020 8939 4650 |
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Financial Dynamics |
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Richard Mountain / Sophie Kernon |
Telephone: 020 7269 7121 |
Notes to Editors
1. Vitec is an international Group, principally serving customers in the worldwide media sector with products and services for the broadcast, entertainment and photographic industries. Vitec is based on strong, well known, premium brands that professionals rely on. Vitec is organised in three divisions: Imaging & Staging, Broadcast Systems and Broadcast Services. More information can be found at: www.vitecgroup.com.
2. More information on Litepanels can be found at www.litepanels.com. The following links give information on the products and their applications, together with some comments from end- users.
www.s131567196.onlinehome.us/news/ontheset.asp
www.veoh.com/videos/v69999592fqqjSEK
www.s131567196.onlinehome.us/products/broadcast.asp
www.s131567196.onlinehome.us/news/ontheset_whitehouse.asp
3. Earnout payments for each year are dependent on the actual operating profit achieved within the following operating profit ranges:
Calendar 2008: between $2.8m and $4.5m Calendar 2009: between $4.5m and $9.0m Calendar 2010: between $4.5m and $12.5m Calendar 2011: between $5.0m and $16.0m
The upfront consideration plus cumulative earnout payments correspond to approximately a 5x EBIT multiple.
4. This statement should not be taken to mean that earnings per share (pre-amortisation of intangibles, stock adjustments or any one-off costs) of The Vitec Group plc will necessarily exceed or be lower than historic earnings per share (pre-amortisation of intangibles) of The Vitec Group plc and no forecast is intended or implied.
5. $ to £ sterling conversions have been shown at the rate of $2.00/£1 for 2007 and $1.87/£1 for 2008.
6. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward- looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect Vitec's current expectations concerning future events and actual results may differ materially from current expectations or historical results.
Related Shares:
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