With the $35 million deal, Vitec Group leaves the U.S. broadcast-services market
August 10, 2017 – Burbank, CA — NEP Group made a major splash last week by acquiring Bexel Global Broadcast Solutions from the Vitec Group. The latest in a long run of NEP acquisitions in recent years combines two of the most established vendors in live sports remote production. The $35 million deal signals the Vitec Group’s exit from the U.S. broadcast-services market in an effort to improve its overall margins, while significantly expanding NEP’s flypack inventory, as well as its fiber-system–integration and rental-equipment businesses in North America.
“We want to become the worldwide broadcast-services leader, and we think this is a big step in that direction,” says Mike Werteen, co-president, U.S. Mobile Units, NEP, adding, “This is the first [acquisition] where every single piece of feedback that we’ve gotten from clients, as well as both the Bexel and the NEP teams, has been positive. We are bringing together best engineering- and fiber-support teams in the industry, so it’s a no-brainer for us.”
Bexel VP, Global Sales, Craig Schiller adds, “NEP has felt like family for many years. We work on the same shows together, our people work side by side together, and they have been a client of ours for years. [Internally], we felt like it would be a great opportunity for us to land within the NEP group. It ended up working out perfectly. We are really pleased because it’s a fantastic home for us as a company and for all of the Bexel employees.”
For NEP: Flypacks, Systems Integration, Equipment Resale
Bexel’s U.S.-based scalable flypack systems bring NEP’s inventory to 34 flypacks, along with a host of other equipment. In addition, the Bexel ESS (Engineered Systems and Solutions) division, which launched in 2012, bolsters NEP’s systems-integration and fiber-solutions businesses. And the acquisition of the Bexel Sales division launches NEP into the broadcast-equipment–sales business, allowing the truck provider to more readily dispose of used equipment following upgrades.
“From an NEP perspective, it’s a great cultural fit between NEP and Bexel in that both companies have similar service-oriented cultures,” says Werteen. “The addition of Bexel adds significant flypack capabilities for us in the U.S., which is something that we’re concentrating on. It strengthens our U.S. fiber capabilities, with the two best fiber providers in the U.S. [combined into] one. We have never had a rental component to our business, and we felt, as the industry is evolving, it’s a capability that we wanted. Frankly, it was a natural fit for us.”
For Bexel: The Brand and Offices Will Remain
Bexel will continue to sell specific services under its own brand, providing flypacks, high-frame-rate specialty cameras, HD-camera chains, lenses, EVS servers, and more.
“Part of the attractiveness of this deal was the luster of the Bexel name,” says Werteen. “Until our clients say that we should view it otherwise, we’re proud to have the Bexel brand as part of the NEP Group.”
Bexel will continue to operate out of its existing headquarters in Burbank, CA, and the Bexel Hub facility in Grapevine, TX. “For us, it’s business as usual,” says Schiller. “Our team is focused on continuing to service everybody that we’ve serviced to date and to continue to provide the engineering and solutions as we’ve done for 35 years.”
According to Werteen, there will be no immediate staffing reductions, but NEP will evaluate various divisions as the two companies are integrated. “From a staffing standpoint, we’re going to retain as many employees across all the NEP divisions as we can,” he says. “If there are redundancies in any overlapping functions, then that would be a cause for reduction. But we’re more focused right now on adding to our divisions that are either understaffed or poised for growth.”
For Vitec: Exiting the U.S. Broadcast-Services Business
According to a Vitec statement, the disposal of its U.S. broadcast-services business “represents a further step in the transformation of the Group and supports Vitec’s stated aim of improving operating margins.” The disposal is expected to improve margins and return on capital employed (ROCE) and to be neutral to FY2017 adjusted earnings per share. The net cash proceeds of $32 million will be used to reduce net indebtedness, according to Vitec.
“There was a strategic decision made by the Vitec Group to divest the Bexel business,” says Schiller. “They’ve been a great owner for us for over 25 years, and we’ve been able to accomplish a lot of great things under their leadership.”
In 2016, Bexel generated an adjusted operating loss of $1.9 million on revenue of $64.2 million and operating cash of $5.2 million after capex of $9.6 million and rental-asset disposals of $5.5 million. As of year end 2016, gross assets were $37.6 million. Estimated net assets at completion are $25.0 million. Bexel continued to record an operating loss in first half 2017, with break-even targeted for second half 2017.
“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,” Stephen Bird, group chief executive, Vitec, said in the company’s announcement. “The disposal makes strategic and financial sense for Vitec as we continue to transform the Group.”
This article first appeared on sportsvideogroup.org.
For over 35 years, Bexel, an NEP Broadcast Services Company, has been a leading global provider of outsourced innovative broadcast solutions for producers of sports, entertainment, and live events. Our services include production equipment rentals and engineered solutions for 4K and specialty cameras and lenses, RF audio and intercom, production workflow, custom flypacks, frequency coordination, and fiber optic solutions. We pride ourselves on exhibiting operational excellence from concept to completion. From our custom shipping cases designed for each rental package to save our client valuable time and money, to our commitment to quality when designing, building and installing full-service broadcast infrastructures, Bexel’s reliability is unmatched for providing value-engineered solutions and services.
For over 30 years, NEP has been a worldwide outsourced technical production partner supporting premier content producers of live sports, entertainment, music and corporate events. Our services include remote production, specialty capture, RF and wireless video/audio, studio production, audio visual solutions, host broadcast support, post production, connectivity and transmission, premium playout and innovative software-based media management solutions. NEP’s 4,000+ employees are driven by a passion for superior service and a focus on technical innovation. Together, we have supported productions in 88 countries on all seven continents. NEP is headquartered in the United States and has operations in 24 countries. Learn more at nepgroup.com.
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