Francisco Partners, the new owners of Grass Valley, wants the industry and Grass Valley's customers to know it is committed to bringing Grass Valley back to its glory days and is prepared to invest millions over the long haul to make that happen.
At a pre-NAB press conference at the MLB Network facility in Secaucus, NJ, one of Grass Valley's largest customers on the East Coast, Grass Valley officially introduced its new president and CEO Alain Andreoli to the trade press.
Intimately involved with the roughly nine months of negotiations to acquire the Grass Valley business from Technicolor, Andreoli is a Frenchman with a knack for successfully running large equipment suppliers, including Sun Microsystems Europe. He said he sees many similarities in the transition of the IT industry several years ago and the migration to HD (and beyond) among broadcasters today.
Andreoli called the negotiations “a pretty difficult period” and said the goal going forward is to make Grass Valley profitable within a year
“The capabilities and skills within the company and its loyal customer base made us realize that Grass Valley is a company worth investing in over a long period of time,” he said, adding that Francisco Partners is prepared to invest in the business for as long as it takes to achieve profitability. It will earmark nearly 15 percent of Grass Valley's revenue for R&D and new product development to make that goal come to fruition.
“(Growing the Grass Valley business) will take years, and we're willing to support that and let the company flourish as an independent business,” Andreoli said.
Francisco Partners had been looking at the broadcast/professional video space for about two years when the opportunity to invest in Grass Valley came along. Andreoli said Francisco Partners tends to shy away from investing in startups and instead focus its efforts on established companies with “a foundation of innovation.”
“We want to drive an agenda for 'balanced' change, but understand that these things take time,” he said. “We can see the strengths of the assets that the company has developed over the years and the strong relationship with its customers and its ecosystem.”
He said Francisco Partners was attracted to the broadcast market after seeing so many vendors, with five of them in the half billion and above range (in terms of revenue) supplying products. The Grass Valley business, he said, represents “an interesting door to enter this market” with its iconic presence of 50 years of innovation and its breath of products that make it a virtual “one-stop-shop” for customers looking to deploy end-to-end systems.
Interestingly, 70 percent of Grass Valley's business comes from outside the United States, and 60 percent of its staff works among Grass Valley’s numerous facilities overseas.
“We felt this was the right time to step in and try to unleash the potential of a company that has not flourished very well under the Technicolor umbrella,” Andreoli said.
In a symbolic first step, Francisco Partners has reorganized the existing Grass Valley business, which most recently had been under the leadership of Jeff Rosica, as senior vice president. Rosica, who is relocating to San Francisco, has been promoted to executive vice president and chief sales and marketing officer and is now responsible for the company's customer-facing and marketing activities around the world; Ian Halifax has been named executive vice president and CFO. Together, they will form the triad of executives that will lead the new business.
A number of current Grass Valley employees will remain in similar roles in the new business structure, including Charlie Dunn, senior vice president and general manager of the editing, servers and storage product group; Martin Fry, senior vice president/GM of the routing and signal management product group; Marcel Koutstaal, senior vice president/GM of the cameras product group; Scott Murray, senior vice president/GM of the live production solutions product group; and Dave Perillo, senior vice president of global operations.
Andreoli said his team has a lot of decisions to make in the short term, “and we have begun to do that,” including the establishment of a new corporate structure of four main products groups and a professionals services division.
“From the customers' perspective, they will not notice a lot of changes to the way they interacted with Grass Valley before,” Andreoli said. “What they will see is that the company is getting financially stronger and better able to innovate and address their individual requirements faster. I think Francisco Partners understands what it has in Grass Valley and wants to see it brought back to its glory days.”
While declining to get specific, Grass Valley’s Rosica said to expect several new and enhanced products at the upcoming NAB Show. From his demeanor, it's clear that Rosica is happy to move beyond the past year of ownership uncertainty.