Vitec (VTC) has acquired Amimon, a developer of chipsets and modules for real-time wireless video transmission, primarily for professional filmmaking and high-end productions. Vitec – itself a provider of premium broadcast and photographic equipment – paid $55m (£47.2m) in cash for the business, but anticipates a total investment of $59.9m. Not a negligible sum considering the group’s £565m market capitalisation.
Amimon is headquartered in California, but its research and development centre is based in Israel. It will be integrated into Vitec’s creative solutions division.
While Amimin reported $18.6m in revenues in 2017, it saw operating losses of $0.7m. Some might, thus, question the rationale here for the acquirer.
In answer, Vitec sees the deal as part of its plan to expand into the wireless video market, while gaining access to new intellectual property. It also says that the deal advances its objective to achieve mid-teen adjusted operating profit margins. It should be earnings enhancing from 2019.
Broker Peel Hunt notes that Amimon’s aforementioned losses last year stemmed from high R&D spend and its gross margin is actually above Vitec’s group average.
