Barco announces the acquisition of High End Systems, Inc (HES). Based in Austin, Texas, High End Systems employs 156 people and is a profitable company with $44 million USD sales in 2007. With the merging of two strong industry players, this acquisition reinforces Barco’s leadership position in the fast converging video and lighting segments. The total value of the transaction is $55 million USD, which implies an EBITDA multiple of around 8 on the past 12 months. The impact on 2008 EPS is estimated to be about neutral due to the required IFRS restatements.
Eighty percent of High End Systems’ sales are realized in the Events (Rental & Staging) market, which makes it a perfect match for Barco. High End Systems will be fully integrated into Barco’s Media and Entertainment division.
With the growing convergence of lighting and video technologies, the acquisition of High End Systems is a merger of two strong industry players and as a combined force it will hold a leading position in this converged digital video and lighting space, enabling further growth. This is fully in line with the strategic goal of enlarging Barco’s presence in each of the key markets it is active in.
Stephan Paridaen, president of Barco’s Media and Entertainment division states: “We are proud and excited about joining forces with the leading player in the digital lighting market. High End’s differentiated product line-up and recent product introductions are clearly proof of their market-led vision and strong R&D focus. We look forward to introducing many new and exciting products into the converged lighting/video space together.”
“The acquisition is a great outcome for the employees of High End Systems and we are confident that the combined creativity and customer focus of Barco and High End Systems will deliver superior technology for the global entertainment markets,” says Merritt Belisle, chairman of High End Systems, Inc.
The acquisition provides Barco also with an additional patent portfolio in the digital lighting market, along with increased distribution channels and product offerings worldwide. The acquisition further strengthens Barco’s position in North America, another strategic goal, and will create an opportunity to strengthen its natural hedging over time as the High End Systems product portfolio will be further rolled out globally.
High End Systems, Inc. was majority owned by Generation Partners, a US private equity firm.
More details on the acquisition will be provided with 2Q08 results on July 23, 2008.