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Edius maker Grass Valley sold to Black Dragon Capital
  • Private equity firm Black Dragon Capital will acquire the entirety of Grass Valley, a leading technology supplier of advanced broadcast and media solutions, from Belden Inc. (NYSE: BDC). The transaction is expected to close after customary regulatory approvals.

    Black Dragon, which makes control investments in growth companies it believes can become market leaders in industries disrupted by digitization, has significant experience in media technology, and plans to accelerate Grass Valley's evolution to being the market leader in digital media and open and inclusive cloud technology, according to Louis Hernandez Jr., Founder, Managing Director and CEO of Black Dragon.

    "Grass Valley has an iconic brand, track record of strong performance, superb clients and products that compete in the top tier in every category they're in. We are excited and honored to work with Grass Valley's leadership team, partners and resellers to take the company to the next level with a cloud-enabled, software-based business model, and cement its role as the standard bearer for the future of digital media," Hernandez said.

    "We're excited by the opportunity Grass Valley has to lead in an industry where other heritage brands have struggled. Grass Valley's investments in cloud-based and Software as a Service (SaaS) solutions are promising. We believe the combination of a broad product suite, a great team and the direction of the market will make Grass Valley the partner of choice as the digitization of the space accelerates. While Belden won't retain any ownership or have an impact on operations, we are pleased that they will remain a close, long-term collaborative partner, which will ensure a smooth transition," Hernandez said.

    Grass Valley President, Tim Shoulders, and his senior team will continue to lead the company. Hernandez will become Executive Chairman and, along with selected Black Dragon colleagues, will work with Grass Valley leaders on strategy, execution, client relations and the accelerated expansion to a cloud-based subscription model.

    "We are excited about this new phase for Grass Valley. Black Dragon's experience and vision will help us accelerate our move to cloud-based and SaaS solution product lines that will please customers seeking the most robust and flexible models for content production and delivery. We are delighted to be embarking on this journey with our customers and Black Dragon," Shoulders said.

    Said John Stroup, President, CEO and Chairman of Belden Inc., "We are very pleased to partner with Black Dragon Capital. Their deep media-related expertise, proven track record and relationships in the broadcast community make them the perfect partner to drive Grass Valley to the next level. We are excited to be part of the partnership."

    Black Dragon takes an operationally led and thesis-driven approach to making investments and working with portfolio companies. Investments are based on the firm's significant understanding of the impact of digitization on workflow, technology, economics and human factors driving in the digital landscape. Black Dragon principals and advisors are engaged participants in the industries and companies in which they invest, and they work closely with the portfolio companies to create market leaders.

    The Black Dragon principals and advisors involved in the Grass Valley acquisition include Hernandez; Mohamed Abuagla, former EVP and CTO of Al Jazeera and Advisor; Dr. Andreas Bereczky, former SVP and CTO of ZDF Germany and Advisor; Peter Neothen, CEO of Quest Media GMBH and Advisor; Gary Bettan, CEO of Broadfield Distributing Inc. and Advisor; Sandy Nassari, Founder and CEO of Melrose Inc. and Advisor; Shengli Han, Vice Chairman of Beijing Jetsen Technology and Advisor; Frank Capria, media product specialist; and Mo Hussein, media finance professional. Several other executives who worked at Avid with Hernandez were involved in the company assessment and strategy. The Black Dragon transaction team was led by Tim Greenfield, Partner, and Dan Consigli, Partner and CFO.

    Cowen and Company served as advisor on the transaction, and Greenberg Traurig LLP served as legal counsel.

    Can become personal vendetta of sacked former Avid CEO Louis Hernandez Jr. against Avid.

  • 3 Replies sorted by
  • At least they've got strong motivation to drive technology progress forward with Edius (and their other products) to beat Avid, if as you said they might have a "vendetta".

    This is good news, they won't just strip Grass Valley bare then let it die. This will instead heat up the competition.

  • @IronFilm

    Yes, and it is man with connections and money, who has big tooth on Avid and their investors.

  • Dear EDIUS users,

    Grass Valley has a new owner, like many times before.

    But this time Grass Valley has an owner who has a lot of experience in the broadcast world, without being a competitor. And a team of consultants who have been working in broadcast for many years - some of them know EDIUS very well. That is really great, because they know what potential EDIUS has.

    So Black Dragon will continue to operate Grass Valley as it is. The Management stays the same.

    Sure there will be some changes. There is an "industry's migration to a software-based future" with "new software-based services and pay-asyou- go business models".

    Some EDIUS customers get confused by this announcement because they think that means that EDIUS will no longer be sold as a license to keep, but as a subscription model instead.

    But that is not the message. EDIUS is already available as SaaS* (EDIUS Cloud, see below) and as subscription model (for broadcasters who want to have a subscription model). There is also a floating license model, special licenses for governmental or educational usage and upgrade plans and so on. Basically the customer can already now choose what kind of license he prefers.

    The announcement of the "industry's migration to a software-based future" is not talking about EDIUS, because EDIUS and the EDIUS development team has already done this transformation many years ago (in the beginning this division built only I/O hardware, do you remember?). The announcement is not talking about EDIUS (which is just a small part – about 3% – of Grass Valley’s business), but the rest of the products within the company, which are not software based yet. There is still a lot of hardware sold, but the future is software. For example, TV stations need big playout solutions in hardware – now, just as in the past. But in the future, this part will be completely software based. That is a really big transformation, but it offers many opportunities: The solutions can be installed very fast and be managed remotely. They are very scalable and the entry level for installations is lower. And many parts of the broadcast business are still "classic" SDI cable based solutions. That is changing now. IP based workflows allow a customer not to buy a 1 million dollar video switcher, but to rent it as a software service – just for the production. That’s what Grass Valley is talking about.

    So please, dear EDIUS user, don't understand the message wrong, nobody is willing to kill EDIUS license sales. Not now and not in the future. It is a good business. EDIUS is not only sold in broadcast, but has a big user group in the professional area (and other markets) where there is no acceptance for a subscription model.

    So EDIUS will also be sold as a license in the future. You buy it, you keep it. That is an EDIUS slogan like "edit anything".

    The message is that the future is software. And that shows what is important in Grass Valley. EDIUS technology is used broadly in Grass Valley services e.g. for transcoding. It is a core technology (because EDIUS supports basically every format natively – more than any other editor on the market). And which is not just working in EDIUS. It is working in a lot of Grass Valley solutions and in the future it will get even more important.

    And that is great news. Now, by having an investor who is not from the old hardware/cable/copper area (as the previous owner), but understands the value of software, EDIUS will be pushed even more inside Grass Valley. There will be more investment in the EDIUS team and EDIUS technology!

    So EDIUS will get even better and stronger.

    Grass Valley is currently very well positioned. It is the market leader in many areas and highly profitable.

    So some EDIUS users have been wondering, why is Belden selling Grass Valley anyway?

    The reason why Belden wanted to separate from Grass Valley is that it is not as predictable compared to the constant, very predictable core business – the sale of cables. So it doesn't fit Belden's core business, even if there are still many cables involved at Grass Valley ...

    Under Belden, Grass Valley has increased its market power enormously through acquisitions and the introduction of numerous innovations. Grass Valley has just won a deal that will use over 150 high-end Grass Valley cameras in Tokyo 2020 (the Olympics in Japan). And that in Japan, which itself has enough well-known camera manufacturers...

    The management of Grass Valley and the EDIUS team are delighted with the sale to Black Dragon. Grass Valley will no longer be tied to the very rigid quarterly reporting, which Belden, as every public company, has. And this increases the flexibility when it comes to the introduction of products and the implementation of projects. Before, at the end of a quarter, all projects had to be completed as far as possible, and everything had to be reported with relevance to the market. Differently from Belden’s core business cables, this lead to a lot of additional work in the broadcast and media section. Now there will be more capacity to be used for innovations and projects instead.

    Grass Valley offers the right solution for every type of customer. This will always be the aim of Grass Valley.

    Michael Lehmann-Horn
    CEO magic multi media GmbH,
    operator of EDIUS.NET