Costar acquires Arecont Vision
Costar Technologies has announced t it has signed a definitive agreement to acquire the assets of Arecont Vision out of Chapter 11 bankruptcy. The purchase price is expected to be approximately $12 million in cash, subject to certain post-closing adjustments as set forth in the definitive agreement. The acquisition, which is structured as an asset purchase, is subject to customary closing conditions. Costar is financing the transaction with proceeds from a new credit facility with UMB Bank. The Arecont Vision management team and employees are expected to join Costar following the closing of the acquisition.
After integration costs, the acquisition is expected to be neutral to earnings per share in 2018 and mildly accretive in 2019, due to operating synergies and improved efficiencies. Full earnings benefits are expected to be realised in 2020.
Arecont Vision is a manufacturer of network cameras and megapixel surveillance cameras, offering a large selection of megapixel IP devices. Arecont Vision is a US company with headquarters, R&D, manufacturing, and customer support located in California. It employsaround 90 people and generated approximately $40 million in revenue last year.
In making the announcement, Costar President and Chief Executive Officer James Pritchett stated, ‘The acquisition of Arecont Vision expands Costar Technologies’ video surveillance platform by strengthening our product line. It supports Costar’s strategy to become a leader in the video surveillance industry, transitioning from a value-added OEM product company to a manufacturing and design company. Along with our other recent acquisitions, the Arecont acquisition increases our manufacturing and design from approximately 50 to 75 per cent of our revenue.
Raul Calderon, the Chief Operating Officer and General Manager of Arecont Vision, added, ‘Costar’s family of companies, composed of CohuHD Costar, Costar Video Systems, Innotech, and IVS Imaging, is a great strategic fit for Arecont Vision and provides synergies that can be leveraged to grow our business in new market verticals and product areas. Costar provides resources that will enable Arecont Vision to continue to innovate and lead the market. I am proud of our team, and we are grateful for the support, patience and continued commitment of our employees, suppliers and customers, as we look forward to being a new Costar business.