Costar Technologies’ acquisition of Arecont Vision has been approved by a bankruptcy court in Delaware, paving way for a merger in which Costar’s design and manufacturing capability is expected to receive a big boost.Costar Technologies’ acquisition of Arecont Vision has been approved by a bankruptcy court in Delaware, paving the way for a merger in which Costar’s design and manufacturing capabilities are expected to receive a big boost.
According to documents by the Bankruptcy Court for the District of Delaware, Costar offered a purchase price of US$11.25 million, which is higher than the $10 million that Turnspire had offered earlier when Arecont Vision initiated bankruptcy proceedings back in May. According to Arecont Vision in a press release, after the closing of the sale, which is expected to happen on July 13, the assets formerly operated by Arecont Vision will begin operating as Arecont Vision Costar, LLC and be part of Costar.
Costar concurred in a separate press release. “The Arecont Vision management team and employees are expected to join Costar following the closing of the acquisition. After integration costs, the acquisition is expected to be neutral to earnings per share in 2018 and mildly accretive in 2019, due to operating synergies and improved efficiencies. Full earnings benefits are expected to be realized in 2020,” it said.
The Coppell, Texas-based Costar Technologies used to be two distinctive businesses – CohuHD and Costar. The latter acquired the former in 2014 to form the combined company. Even the two have combined, each has its target market segments. CohuHD is well known globally with its specialized, ruggedized video surveillance equipment capable of withstanding extreme conditions and used in military and government applications. Costar, on the other hand, focuses primarily on the US market and targets less critical environments like retail and banking, offering a lineup of cameras, from analog to HD analog to IP, to suit the particular needs of this market.
Costar Technologies ranked No. 40 on a&s’s 2017 Security 50 compilation, based on companies’ 2016 sales. For the year of 2017, Costar made $44.3 million in revenue, an increase of 14.8 percent from 2016.
As for Arecont Vision, it said it has achieved the goal of moving through the bankruptcy process quickly. “The company has been successfully operating under normal business conditions throughout the bankruptcy process, did not experience any layoffs, and continued the introduction of its new Contera IP cameras, video management system, web services, and cloud managed recorders. Under Costar’s leadership, substantially all of Arecont’s employees will be hired by Costar, customer programs and services will continue, and investments will be made into the development of new, industry-leading products,” it said the press release.
According to Costar President and CEO James Pritchett, adding Arecont Vision to Costar will boost the latter’s design and manufacturing capability significantly. "The acquisition of Arecont Vision expands Costar Technologies' video surveillance platform by strengthening our product line. Along with our other recent acquisitions, the Arecont acquisition increases our manufacturing and design from approximately 50 percent to 75 percent of our revenue,” he said.
Raul Calderon, COO and GM of Arecont Vision, stated, “Costar's family of companies is a great strategic fit for Arecont Vision and provides synergies that can be leveraged to grow our business in new market verticals and product areas. Costar provides resources that will enable Arecont Vision to continue to innovate and lead the market.”
Pritchett meanwhile added: “The Costar management team has known Raul for over 20 years and has worked with him in the past. Raul brings strategic vision, an innovative spirit and proven leadership qualities. Together, with his team of sales managers and territory salespeople, he has built an extraordinary organization. We are very proud to welcome them to Costar Technologies.”