Grass Valley President Tim Shoulders on Next Steps for GV
Belden announced Wednesday that it is divesting the production-technology company
Belden’s announcement today that it is divesting Grass Valley sent ripples through the industry and had people asking, What’s next for Grass Valley? Grass Valley President Tim Shoulders spent a few minutes discussing the situation with SVG and offered good news for GV customers and the company. He is confident that the move is a positive, especially given the industry’s changing dynamics. The likely outcome, he says, is a new private-ownership structure and a seamless transition for customers, who ultimately should not care who owns a business as long as the quality of products and the delivery of those products remain at a high level.
“Things are changing as purchasing models go from capex to pay-as-you-go and from proprietary hardware to COTS hardware,” he says. “We are changing to meet new market demands that are going to cause some disruption, like the J curve. But going through those changes as part of a public company is difficult because you need to deliver results for shareholders. So we will be able to more readily do that under private ownership, and we can help transform the business going forward.”
Private ownership typically buys a company two years of investment, which would give Grass Valley the opportunity to embrace new business models like SaaS, cloud services, and subscriptions. The effort might show a potential loss for the near term but then provide a profitable return on that investment after the initial 18- to 24-month period.
“With private equity,” Shoulders says, “you can drive growth in a few years. When you are public, you have to carefully balance things and reduce costs.”
He adds that the current management team will remain intact and customer-facing roles — sales, marketing, R&D — will not be impacted because those functions are not shared the way accounting and other back-office functions are.
Grass Valley has historically been well-known for its heavy investment in R&D, and Shoulders expects the new owners to understand the importance of the current transformative period that the industry is going through. And Belden, he adds, has laid a good foundation for those future efforts by instilling discipline, right sizing, and helping put Grass Valley in the top quarter of the industry in terms of profitability.
“SaaS and cloud-based services will be core to our strategic plan, and no one can do it better than us because we have such a broad product portfolio,” he says. “We are building out solutions that have value and create operational efficiencies, and we are still committed to making a big splash at NAB. We have key product launches as our camera and switcher teams have some exciting things planned.”