Private equity firm to acquire Telestream

Telestream (, a Nevada City, CA-based based provider of video transcoding and digital media software systems, has agreed to be acquired by private equity investment firm Thoma Bravo (with offices in Chicago and San Francisco) in order to grow Telestream's core businesses and, perhaps, make further acquisitions.

The transaction is expected to close in early January 2012. Terms of the deal were not disclosed as both companies are privately held.

With the significant increase in portable devices in the marketplace, Telestream acknowledged the increasing need for multiformat, file-based video encoding and transcoding systems to distribute and display numerous versions of the same content. The new influx of capital from Thoma Bravo appears to be a good way to meet this demand by bringing next-generation products and managed services to market quickly.

Dan Castles, Telestream's co-founder and CEO, said, "We look forward to our next phase of growth and expansion with Thoma Bravo as we continue to play a leadership role in the digital media industry."

"Vendors like Telestream have been helping to fuel growth in the digital video market by providing solutions that help media companies meet the challenges of scalability and economically creating and delivering the massive volumes of content demanded by a multiscreen environment," said Mukul Krishna, Global Director, Digital Media at Frost & Sullivan.

"The video ecosystem continues to grow and expand as customers require increasingly complex tools to manage their end-to-end video workflows," said A.J. Rohde, vice president at Thoma Bravo. "Thoma Bravo sees significant opportunity in the digital media market, and Telestream is well positioned as a strong platform for increased investment in the industry."

Telestream said it has been profitable since 2001 and will report, at the close of 2011, 13 straight years of record sales growth. The company has self-financed three acquisitions: compression specialist Popwire in 2006; live webcasting and screencasting provider Vara Software in 2008; and Anystream, a leading provider of automated multiplatform media publishing systems, in 2010.

Telestream will continue to operate as an independent entity with existing management teams continuing their current roles. Headquarters will remain in Nevada City, with offices in Virginia, Sweden and Germany.

Thoma Bravo looks to be targeting the media distribution sector in a big way. Earlier this month, an investor group led by the Thoma Bravo agreed to purchase Blue Coat Systems, a maker of enterprise security and network software, for $1.3 billion in cash.

Blue Coat, based in Sunnyvale, CA, specializes in applications that help businesses optimize their online networks for speed and efficiency. Its security products, which are also offered through the so-called cloud, also help companies control and monitor the data that flows from the Web.