MENLO PARK, Calif.-In the video-technology arena, 1998 was marked by numerous acquisitions, most notably Avid Technology’s purchase of Softimage and Autodesk’s announced plan to acquire Discreet Logic. As the year drew to a close, two more such announcements were made.
Accom, the Menlo Park-based maker of digital-video production, recording and editing tools, acquired virtually all the assets of Scitex Digital Video (SDV), a subsidiary of Redwood City-headquartered Scitex Inc., in a Dec. 10 deal valued at roughly $10 million. SDV, which develops digital-video manipulation equipment and nonlinear video workstations, was formed in late 1995 through Scitex’s acquisition and subsequent merger of ImMIX and Abekas Video Systems.
And Pinnacle Systems, Mountain View, (NASDAQ: PCLE) announced Dec. 16 that it has entered into a definitive agreement to acquire Truevision (NASDAQ: TRUV), a supplier of digital-video products, in a transaction designed to extend Pinnacle Systems’ position in the desktop digital video-capture and editing market. The deal, valued at approximately $14 million in stock, is expected to close Q1 1999.
Accom
The name Scitex has been discontinued, although Scitex product names such as Sphere and Abekas will remain in use. "Accom and SDV combined will offer a broad product line, comprised of outstanding products in the areas of digital-video effects generators, digital disk recorders, linear and nonlinear editors and virtual sets aimed at the professional video market," said Junaid Sheikh, chairman/CEO of Accom. He told SHOOT the company would explore the "cross-fertilization" of Accom and SDV technology.
As part of the transaction, Accom shut six SDV facilities and reduced its staff. Sheikh said there were roughly 70 layoffs, and Accom now has about 135 employees. "We believe that the company is now correctly sized to be profitable at the current revenue level." He reported that the combined companies expect to operate at an annual revenue level of approximately $40 million and that Accom will be profitable in 1999.
Accom also recently announced some additions to the management team. Phillip Bennett has joined Accom as executive VP, technology; William T. Ludwig as VP, worldwide sales; and Donald K. McCauley as VP/CFO.
Bennett was a founder of Abekas and its VP, engineering, from 1982 to ’93, and he managed all aspects of R&D, from inception to a staff of 60. Prior to Abekas, he was project manager for the Ampex special effects group. Since ’93, Bennett has been a private investor and active in image-processing and television systems development.
Ludwig joins Accom from Pinnacle, where he was VP of sales for the Americas/Far East. Previously, Ludwig was sales director with FAST Electronics and held several sales positions at Abekas, including sales director for the Americas/Pacific, over an 11-year span.
McCauley was a founder of ImMIX and its CFO. He became VP/CFO of Scitex Digital Video when Scitex purchased Abekas in 1994. Before ImMIX, he was VP/CFO of Grass Valley Group, a subsidiary of Tektronix in Grass Valley.
Pinnacle
At press time, many details of the Pinnacle-Truevision deal had not been ironed out. Mark Sanders, president/CEO of Pinnacle, told SHOOT the company intends in some way to retain the brand name Truevision as well as product names such as Targa. "We believe this transaction will strengthen Pinnacle’s position as the leading supplier of digital video-capture and editing products," Sanders said. "Truevision’s product lines complement Pinnacle’s well, and together we will serve a far wider array of customers and applications in the digital-video editing market. … In addition, we believe there are potential efficiencies to be gained, particularly in the areas of distribution and manufacturing.
"Most important, Truevision has invested heavily in its next-generation architecture for video editing, particularly in new, custom chip technology that is scaleable for high-definition television applications. We believe that combining this technology with parallel chip developments underway at Pinnacle will afford Pinnacle competitive advantages in next-generation capture card and video-editing platforms," Sanders continued.
At the completion of the transaction, the company expects to maintain Truevision’s engineering and customer-support operation in Indianapolis and to merge Truevision’s Santa Clara engineering, sales and logistics operations into Pinnacle’s Mountain View headquarters. "By combining the two California facilities into Pinnacle’s Mountain View location, we have the potential to recognize significant operational cost savings," Sanders said. He added that there may be a "small amount" of layoffs where there is overlap. When the transaction is completed, he expects the company would employ 450-500.
