Miranda to acquire VertigoXmedia
Miranda has entered into an agreement to acquire privately-held VertigoXmedia, inc. and its broadcast division. VertigoXmedia is a Montr al-based manufacturer of high-end graphics automation software and systems.
The closing of the transaction, expected to take place in early May, is subject to customary closing conditions.
The transaction would allow Miranda to add a powerful suite of software workflow and graphics capabilities to its existing, highly successful playout branding products. In addition, the VertigoXmedia graphics platform, a powerful solution for the automated presentation of live graphics, would provide Miranda with a new product range for production environments.
“The demand for live graphics preparation, management and presentation is rapidly increasing as broadcasters strive to create captivating graphics across multiple platforms such as high definition (HD) and standard definition television, the web and Mobile TV,” said Mr. Strath Goodship, President and CEO of Miranda Technologies. “We have been a leader in this segment since our acquisition of Oxtel PLC (UK) in 2001. VertigoXmedia is recognized as an innovator in this field. Their unique tools would benefit our customers by enhancing their ability to brand across multiple delivery formats. Furthermore, it reinforces Miranda’s competitive edge in the midst of the large-scale HD upgrade cycle which is currently taking place in the broadcasting industry.” he added.
The total purchase price is approximately Cdn$11 million, payable in cash, and is subject to adjustments based on the value of net assets being delivered at the closing of the transaction.
VertigoXmedia has been in the broadcast and digital signage businesses for nearly ten years, operating predominantly in North America. For the past three years, the company s broadcast division, which Miranda is expecting to acquire, has experienced an annual growth rate of approximately 20 per cent, with gross margins over 60 per cent. Its revenues reached Cdn$5.3 million for the financial year ended December 31, 2005.
Under the terms of the agreement, the 25 employees of VertigoXmedia s broadcast division will join Miranda. The digital signage division, which is excluded from the transaction and which employs 10 people, will be spun-off in a new entity independent of Miranda, prior to the acquisition.
It is expected that the acquisition will be neutral to Miranda s net earnings in the first year and accretive thereafter. Miranda will sell VertigoXmedia s products through its sales channels. Given the coverage of Miranda s worldwide distribution network, management believes there is an opportunity for significant growth in the sales of VertigoXmedia s products.
VertigoXmedia would be the first acquisition announced by Miranda Technologies since its Initial Public Offering (IPO), which was completed in December 2005.