2 Aug 2017 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
The Vitec Group plc
2 August 2017
DISPOSAL OF US BROADCAST SERVICES BUSINESS
The Vitec Group plc ("Vitec" or "the Group"), the international provider of products and solutions to the broadcast and photographic markets, announces that it sold on 1 August 2017 its US broadcast services business, Vitec Broadcast Services Inc., known as Bexel ("Bexel"), to NEP Supershooters L.P., a subsidiary of NEP Group Inc. ("NEP") for a gross cash consideration of $35.0 million (£26.5 million).
Bexel provides premium outsourced broadcast services and rental equipment focused on the US sports, entertainment and live event production markets.
With offices in more than 20 countries around the world, NEP serves the premium sports, entertainment and other live events production markets, where it offers outsourced solutions, including remote production, studio production, video display and host broadcasting.
The disposal represents a further step in the transformation of the Group and supports Vitec's stated aim of improving operating margins.
For the year ended 31 December 2016, Bexel generated an adjusted operating loss* of $1.9 million (£1.4 million) on revenue of $64.2 million (£47.7 million) and operating cash** of $5.2 million (£3.8 million) after capex of $9.6 million (£7.1 million) and rental asset disposals of $5.5 million (£4.1 million). As at 31 December 2016, gross assets were $37.6 million (£30.4 million). Estimated net assets at completion are $25.0 million (£18.9 million). Bexel continued to make an operating loss in H1 2017, with a break-even operating result targeted for H2 2017.
The disposal is expected to improve Group margins and ROCE and to be neutral to FY 2017 adjusted earnings per share. The net cash proceeds of $32.0 million (£24.2 million) will be used to reduce the Group's net indebtedness.
Halid Hatic, who was Senior VP of Vitec Broadcast Services Inc. will be retained by Vitec to assist with the growth of the Broadcast Division in the US.
Stephen Bird, Group Chief Executive of Vitec commented:
"Bexel has over 35 years of leadership in the live events market and we are pleased to have secured such a natural home for the business, its employees and customers.
"The disposal makes strategic and financial sense for Vitec as we continue to transform the Group. It will allow us greater focus on our core premium branded products and will improve Group margins and ROCE. Vitec is now well positioned as a high quality, strongly cash generative market leader in the provision of products and solutions for the fast changing image capture and sharing market."
Half Year Results
Vitec will release its half year results announcement on Thursday 10 August 2017.
-Ends-
Enquiries:
The Vitec Group plc
Stephen Bird, Group Chief Executive
Kath Kearney-Croft, Group Finance Director
Telephone: 020 8332 4600
MHP Communications
Tim Rowntree / Ollie Hoare
Telephone: 020 3128 8100
Notes:
* Before restructuring costs and impairment of goodwill
** Cash generated from operating activities after net capital expenditure, before restructuring costs paid
1. Balance sheet figures for Bexel exclude cash and intercompany funding
2. Average foreign exchange rate in the period from January to June 2017: £1 = $1.27
3. Average foreign exchange rate in 2016: £1 = $1.35
4. Estimated foreign exchange rate at completion: £1 = $1.32
5. Nothing in this announcement should be construed as a profit forecast
6. ROCE (Return on Capital Employed) is calculated as adjusted operating profit divided by average total assets less current liabilities excluding the current portion of interest-bearing borrowings
A snapshot of The Vitec Group
Vitec is a leading global provider of premium branded products and solutions to the fast changing and growing "image capture and sharing" market.
Vitec's customers include broadcasters, independent content creators, photographers and enterprises, and our activities comprise: design, manufacture and distribution of high performance products and software including camera supports, wireless systems, robotic camera systems, prompters, LED lights, mobile power, monitors and bags.
We employ around 1,600 people across the world in ten different countries and are organised in two Divisions: Broadcast and Photographic.
The Vitec Group plc is listed on the London Stock Exchange with 2016 revenue of £376.2 million.
More information can be found at: www.vitecgroup.com.
About NEP
For over 30 years, NEP Group, Inc. has been the leading production partner supporting premier content producers across the broadcast and live events industries - and across the globe. It provides the technology and know-how to support the most prestigious sports, entertainment, music and corporate events worldwide. Its technical services include remote production, studio production, audio visual solutions, host broadcast services, premium playout, post production and innovative software-based media management solutions. NEP's 3,000+ employees are driven by a passion for superior service and a focus on technical innovation. Together, they have supported productions in over 85 countries on all seven continents.
NEP is headquartered in the United States and has offices in 21 countries. Learn more at nepgroup.com.
LEI number: 2138007H5DQ4X8YOCF14