Quite a significant lift in share price prior to this announcement. Looks like a solid addition at a sensible price to strengthen the video component of the company.

Audinate to acquire Silex Insight video business

Acquisition consideration

The acquisition consideration comprises:

• An up-front cash payment of US$6.5m, representing approximately 2.3 times expected revenue for the financial year ending 31 December 2021.

• Revenue earn-out of up to US$1.5 million may be payable based on the uplift in revenue for the twelve-month period from acquisition date.

If the maximum consideration is payable, the acquired business would achieve improved EBITDA (EBITDA currently nominal) at a lower purchase price revenue multiple. All consideration is payable in cash and will be funded from existing cash reserves.

Audinate Co-founder and CEO Aidan Williams commented:

“We are very excited to acquire a team with widely recognised video hardware expertise and an existing revenue base. The video codecs and deep product expertise in the team, in combination with our Dante networking technology, will enable us to go to market with a variety of full-service video offerings. This acquisition complements the video software skills in the Cambridge (UK) team we established earlier in the year. Together these two deals significantly enhance our video capabilities and know-how – outcomes that have been achieved in only twelve months, notwithstanding the challenges presented by COVID.”

Audinate Group Limited (ASX:AD8), developer of the professional AV-industry leading Dante® media networking solution, is pleased to announce that it has signed an agreement to acquire the video business of Silex Insight SA (“Silex”), based in Belgium. The Silex video business produces video networking products for manufacturers of AV equipment.

The acquisition will include:

• An existing team of 8 engineers with extensive video implementation expertise and average tenure of 16 years;

• An existing revenue base of approximately US$2.5 million from a range of products including video codec IP Cores, Viper Board, Video ASSP and design services;

• Three video compression technologies (“video codecs”): Colibri, together with their own implementations of JPEG 2000 and VC-2 HQ; and,

• The intellectual property related to the video business.