Executive Session with John Stroup

Belden Sees Green In Its New Grass Valley

Belden CEO John Stroup details the strategy behind its purchase of Grass Valley, the integration of its broad line of television production, signal distribution and acquisition technology into Belden and its Miranda operation and what he sees as the market opportunities. 

Belden Inc. announced on Feb. 6 that it would acquire Grass Valley from private equity firm Francisco Partners for $220 million. The deal, which is expected to close by March 31, brings together the broad line of television production, signal distribution and acquisition technology of Grass Valley with the extensive graphics, routing and production equipment lineup of Miranda Technologies, which Belden acquired in July 2012.

Once combined under the Grass Valley brand, the unit will employ more than 2,000 people with annual revenue of $500 million.

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Belden is $2.1-billion publicly traded technology conglomerate that broke into TV production with the Miranda purchase. It's led by 46-year-old CEO John Stroup.

In this interview with TVNewsCheck Contributing Editor Phil Kurz, Stroup discusses the strategy behind the deal, the integration of the companies and the market opportunities.

An edited transcript:

What's your vision for the new Grass Valley?

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Our vision for the combined company is to run Miranda and Grass Valley as a single unit. We think there are enormous complementary aspects to the company, not only from a product line point of view, but in terms of where the companies have been strong historically.

We very much want to be the company that customers look to to solve their broadcast problems. We think we clearly have the potential to be one of the strongest, if not the strongest, companies in the industry.

When people think of Grass Valley and Miranda, certain markets come to mind —  television stations, broadcast networks, cable TV, new media and live TV production. What do you see as your market opportunities?

I would say all of the markets you listed. There is no shift in strategy related to the markets we are going after. We feel like we are better positioned than we were before. Obviously, all of our historical customers continue to be extraordinarily important.

It is important for us to spend time with all stakeholders and make sure we are giving them the technology products and services they need.

What is the split between international and domestic in terms of revenue?

I would guess that it’s probably about 35% United States. That was certainly the case with Miranda. When we combine these businesses, it will be almost perfectly balanced: a third in Asia, a third in America and a third in Europe and the Middle East.

Do you see that split changing over the next three years?

I don’t think significantly. Obviously, we are going to be impacted by market dynamics. At Miranda, 2013 was very strong in Asia. I think our growth rate was about 35% in Asia, while we saw a little bit of a pullback in Europe.

How long was the deal in the works before the Feb. 6 announcement?

At Belden, we had been watching Grass Valley even prior to the [June 2012] acquisition of Miranda. When we acquired Miranda and got to spend more time with the Miranda management team, we gave a lot of attention to the kinds of investments we could be making.

We engaged the ownership of Grass Valley six to eight months prior to the announcement.

You know, a lot of people at Miranda know people at Grass Valley. [Grass Valley CEO] Tim [Thorsteinson] was on the board of Miranda, so there was a connection between Tim and the Miranda folks. That made it pretty easy to establish a dialog.

I understand that Miranda President Marco Lopez will lead the combined companies. Will Thorsteinson have any continuing role?

Yes. Tim is going to remain with us in more of an advisory role and help us with the integration. Tim has been very supportive during the entire process, and I am confident he will continue to be so through the integration.

Where do things stand when it comes to the integration of the two companies?

Obviously, the deal hasn’t closed yet. We hope to close on or about March 31, but in parallel we are communicating. We have already been meeting at the major facilities of Grass Valley. We formed a number of teams to help us with the integration. I would say that given we haven’t even closed the transaction, we are pretty far ahead.

Do you anticipate significant personnel cuts?

What is likely to happen is we will leverage common investments. We thought neither business had the kinds of economies of scale they wanted to achieve.

One example is manufacturing. Both companies’ manufacturing is running significantly under full capacity. Another is sales. In most cases, each has sales teams that are calling on most customers. So I think it is possible there would be a reduction in the number of employees in those areas.

One area where that is not going to happen is R&D.

When would we expect to see the cuts?

That’s hard to predict. The teams looking at where there are opportunities to create more efficiency are still in their planning phases. So it is difficult for me to know with any certainty when we would have a position on that.


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