The $220 million acquisition of Grass Valley by Belden is far more than just the sale of one company. It creates, Belden said, a one-stop broadcast super store where virtually any product can be bought from a single supplier.
“By combining Grass Valley and Miranda, we will create the broadcast industry’s largest and most complete portfolio,” said John Stroup, CEO of Belden, who kept using the word “scale” in explaining the deal to reporters Wednesday in a conference call.
In addition to paying all cash for the company, Stroup said Belden expects to spend another $25 million in the next year to restructure the huge resources of GrassValley and Miranda. The product lines of the two companies, he said, rarely overlap — creating a major bonus and huge value in the deal.
Miranda brings routing and infrastructure, playout, multi-viewers, monitoring, graphics and branding to the table, while Grass Valley specializes in production switchers, servers, production automation, editing and cameras. Together the product offerings allows Belden’s sales force to sell just about any product a broadcaster needs.
Stroup said the conversations between Belden, Miranda and Grass Valley have been “long and deep” and both companies agreed a combination would strengthen both companies. He said that lack of disagreement made the deal much easier.
Grass Valley president and CEO Tim Thorsteinson was credited by Stroup with “turning the corner” with his company in the past year. “Their current management has done a good job of improving some of the structural problems they had earlier,” Stroup said. “Their business performed substantially better in the fourth quarter than in the last full year.”
Grass Valley’s history has been rocky. It was founded as a small research and development company in 1959 by Dr. Donald Hare in the small town of Grass Valley, California, near the Sierra Nevada mountain range. In 1964, the company built it’s first product — a video distribution amplifier. The first switcher came in 1968.
In 1974, it merged with Tektronix and did well for the next 15 years. Then Tektronix sold its video business to a private investor, Terry Gooding of San Diego, who reincorporated it under the name Grass Valley Group, Inc. That sale closed on September 24, 1999.
In 2002, Thomson Multimedia (now Technicolor SA) acquired Grass Valley Group. After coming under the ownership of Thomson, Grass Valley Group was forced to merge its product line with the existing professional and broadcast products of its new parent company, with mixed results.
After the financial crisis of 2008, Thomson was forced by its creditors to divest itself of Grass Valley and other manufacturing entities. On January 29, 2009, Thomson announced that they were putting the Grass Valley division up for sale.
In 2010, the Grass Valley business unit was acquired by private equity firm, Francisco Partners, and resumed operating as an independent company on January 1, 2011.
Now, if the deal passes muster with regulators, Grass Valley will be part of Belden by March 31.