Behind the Acquisition: Orad Perspective on what It Brings to the Avid Table
One of the biggest talking points as the NAB exhibits opened Monday morning was Avid’s acquisition of Orad Hi-Tec Systems, announced Sunday night. Israeli company Orad, stock exchange-listed in Frankfurt, brings studio displays, 3D realtime graphics, video servers, sports replays and MAM to Avid in an all-cash deal valued at €5.67 per share financed by a new $100 million senior subordinated credit facility.
On the show floor Monday, Vice President of Marketing Ofir Benovici provided an Orad perspective on this major Avid acquistion. “We signed the contract yesterday,” he said. “Closing will be two to three months from now, so until then we will be operating as a separate company — business as usual.
“The process itself was short,” commented Benovici. “It wasn’t like a year of negotiation, it was a few months of very intensive discussion. Obviously I cannot talk about the Avid perspective, but from Orad’s side, Avid is probably the best match that we could find in the market. And the reason for that is if you look at our product range and the Avid product range they compliment each other very well. The overlap is minimal; you can argue that it’s maybe 3% or 5% of our business – so it’s minimal.
“Today, let’s say this deal was not happening and you walked onto the Orad booth and asked me, ‘who is the number one vendor that you integrate with?’ I would say Avid. We have worked closely together with Avid on a product level for many years. Again it comes back to the complimentary nature of their products and our portfolio.
“That means that, even today as we join forces with Avid, we start from a very high point of integration – to iNews, Media Composer, Command, ISIS. We don’t need to start thinking about how to proceed – it’s there, it’s ready,” said Benovici.
“And if you take all the Orad products and you put them into the much bigger Avid machine, with bigger sales and marketing, market reach, support, R&D resources … this is the logic behind it, from our perspective. What will happen – I don’t know what will happen. I’m not allowed to speculate. But that’s the logic behind it,” he said.
While admitting that a particular point of overlap is asset management (expecially considering the 2011 Orad acquisition of MAM specialists IBIS), Benovici said, “Yes. I don’t know what will happen there. But if you look at it from a business side, it’s not a big portion of what we do in Orad. In the context of everything else, it is not big.
“We are all excited,” he continued. “We see this as a great opportunity to expose our products to a much bigger machine with bigger market reach. We are growing the company year over year. We’re publicly traded in Frankfurt, and last year was a very good year for us, with over $40m revenue — more than 25% growth year on year. We can continue to grow the company – maybe not at that level but at say 10-15% — but with Avid we can get to our target faster,” said Benovici.
“We have followed Orad’s success in the market for many years and are excited about the prospects of what our combined companies can accomplish,” said Louis Hernandez, Jr, Chairman, President, and CEO of Avid as the acquisition was announced. “Our industry is in a period of significant transition, in which our customers are demanding a single platform to connect creation with collaboration, asset protection, distribution and monetization. We believe this transaction further differentiates Avid as the partner with the most comprehensive solution, and accelerates our momentum as we enable our customers to operate more efficiently and profitably.”