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Vislink Buys Pebble Beach for $25M

HEMEL HEMPSTEAD and WEYBRIDGE, ENGLAND—Wireless comms provider Vislink has stepped squarely into the media automation playout business with the $25 million acquisition of Pebble Beach Systems.

“Pebble Beach Systems is a perfect fit given our focus on product leadership and it will enable us to offer our global broadcasting clients a complete scene-to-screen solution. Additionally, the acquisition fits perfectly into our long term strategy of acquiring software and services capability that we hope to drive recurring revenues for the group,” said John Hawkins, Vislink’s executive chairman.

Vislink says the acquisition of Pebble Beach Systems will move it into the provision of software solutions for playout. The company’s existing product line focuses on wireless communication systems for the capture of live TV coverage of news, entertainment and sports. It will now include television automation and media management services for broadcast studios. Vislink says that in turn, Pebble Beach Systems will gain from “significantly increased sales channels through the global network of over 900 broadcasters with which Vislink works, as well as its international network of offices.”

Pebble Beach Systems will continue to operate as a standalone unit within the Vislink Group and its founders, who will continue to manage the business, will be staying with the company and assisting Vislink in expanding its software capability as a group.

Vislink bought Pebble Beach for a total consideration of £14.9 million (US$24.78 million), comprising £12.9 million (US$21.45 million) payable in cash and £2 million (US$3.33 million) represented by the issue of 4,700,904 new Vislink ordinary shares at a price of 42.545 pence (US$0.71) per share, being the average mid-market closing price of Vislink’s shares for the last 25 business days before, but not including, the day of completion. Pebble Beach Systems has been purchased with in excess of £5.9 million (US$9.81 million) cash on the balance sheet, resulting in an effective net consideration of £9.0 million (US$14.9 million).

The cash consideration will be funded out of existing group resources and a new £10.0 million (US$16.93 million) debt facility. The facility has a three-year tenor and is split into a £3.0 million (US$4.99 million) amortizing term loan and a £7.0 million (US$11.64 million) flexible revolving credit facility. The facility charges are on normal commercial terms.

Founded in 2000, and employing over 60 staff, Pebble Beach Systems is a developer and supplier of automation, channel-in-a-box and content management solutions for TV broadcasters, cable and satellite operators. The business is headquartered in Weybridge, Surrey with offices in the United States, Dubai and Singapore.

Pebble Beach Systems automation products are suitable for multichannel playout as well as live programming environments such as news or sports, while supporting HD, IPTV and interactive television. Clients include TV Globo Brazil, MBC UAE, Fox News, KCET USA, Banderaintes Brazil, OSN UAE, Viasat UK and ZDF Germany, with installations in over 60 countries.

Pebble Beach Systems benefits from long-term contracts with clients and for the 12 months ended 30 June 2013, its audited accounts recorded turnover of £5.64 million (US$9.38 million), EBITDA of £1.30 million ($2.16 million) and profit before tax of £1.30 million ($2.16 million). Net assets were £4.37 million (US$7.27 million) and it has in excess of £5.9 million (US$9.81 million) in cash on its balance sheet at the time of completion. The transaction is expected to be immediately earnings enhancing.

Application will be made shortly to the London Stock Exchange for 4,700,904 new ordinary shares to be admitted to trading on AIM pursuant to the vendor share consideration. It is expected that admission will become effective on March 25, 2014.

Following the issue of the 4,700,904 new ordinary shares, the issued share capital of the company will be 118,603,134 ordinary shares of 2.5p each. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the company under the Disclosure and Transparency Rules.