Earlier this year, Miranda Technologies completed its acquisition of privately held NVISION, which is based in Grass Valley, CA. The all cash transaction, which was originally announced on December 10, 2008, is valued at $40 million and will be financed with cash on hand and existing credit facilities.
I recently talked with Miranda’s CTO, Michel Proulx, about the acquisition.
Q: Why were you interested in purchasing NVISION?
A: It’s pretty clear that our product lines are very complementary. We’re building all the infrastructure equipment but didn’t have a router line. They have a router line. NVISION was working with Axon for the infrastructure components as sort of an EOM agreement.
Q: Explain how the NVISION products complement Miranda’s product line?
A: There are really three basic areas where we complement each other.
The first is in the area of routers and interfaces. When a customer is buying a router, he also buys interfaces. And, if a client is purchasing a group of interfaces, he’s likely to also need a router at the same time.
Second, anytime someone is buying new components to build out a master control center for branding, there’s often a new router in that mix. Clearly we want to be in that mix.
Third, multiviewer walls are becoming larger and larger. The best strategy is to combine a new router and multiviewer together. By combining, I don’t mean necessarily integrated together or in the same package, but customers often need to buy both a multiviewer wall and router. Now, we can be well placed when those discussions take place.
So, if you look at our business, routers goes with all three of the above areas. It’s a good solution for Miranda, NVISION and our combined customers.
Q: Explain how the purchase makes Miranda stronger?
A: I believe the synergy of our two companies combined is greater than of them separately. I like to say that one plus one equals three — a stronger package of solutions.
My finance guy defines synergy as one plus one equals 1.5. But, you see, he’s looking at costs. And it’s true that we will be able to take advantage of consolidating synergy.
Q: How will you handle router branding?
A: The rule is, there is only one company, and that’s Miranda. The NVISION name becomes the name of the router line. It’s the logical and clean way to do it. The NVISION brand is a well-known and respected name, but there can be only one company name and that’s Miranda. NVISION becomes the product line for routers.
Q: How will you handle product support?
A: Almost two years ago, we restructured Miranda into product business units. That included monitoring, infrastructure, master control and channel branding. So, we’ve added another product business unit called routing.
Within each business unit you’ll find: engineering, product management, technical support, product specialists and a sales force focused on each of these areas.
So, for instance, when a call comes in for technical support, the call is first routed to a common person, someone familiar with all brands. Once our person knows who’s best qualified to help the customer, the call is forwarded to specialized product support for resolution. This has worked well for our product mix.
Q: How will you handle manufacturing?
A: We plan to keep manufacturing separate. The specialization of each of these two areas is important, so we’ll keep the production lines at their current locations. The routers will be built in Grass Valley and the Miranda products in Montreal.
Q: What themes do you expect to see at this year’s NAB convention?
A: I believe there will be two key themes. The first will be an emphasis on operational expenses instead of capital expenses. People are looking for ways to save operational money. Sometimes that means spending capital to do that, but customers seem ready.
The second theme for this year’s show will be 3Gb/s equipment. Last year there was some noise about 3Gb/s equipment, but this year’s products will be real.
For broadcasters, 3Gb/s represents a lot of work for little return. However, that same technology can be leveraged into 3-D or stereoscopic TV, where the return is much greater. I think we’ll see a high level of interest in stereoscopic TV and we think that’s a better justification for 3Gb/s equipment.
For instance, while it’s true that 1080p images are better than 1080i images, the improvement is marginal and requires a lot of effort. Can the viewer see the difference? Maybe, but it often depends on how the cable system treats the signal.
But with 3-D or stereoscopic images, the improvement is dramatic. When we ask customers about their work in 3-D, most don’t want to say much. But, when you watch the body language and listen to the questions they ask, it’s obvious that content producers see stereoscopic TV as an important part of their future. We believe this is where 3Gb/s equipment will first be needed.
For Miranda, we’re able to spin up a product that we’ve planned for 3Gb/s and turn it into a 3-D/stereoscopic product with little effort. The product will already have the required bandwidth. We simply reprogram the FPGAs and suddenly we have 3-D products ready for these customers.
Because Miranda has both experience and products in 3Gb/s, it’s not hard to spin them into 3-D solutions.