News Production & Post

Canopus deal to enable Grass editing

15 December 2005

Thomson announced last week that it has signed an agreement to acquire 33 1/3% of the issued and outstanding shares of desktop video editing and codec company Canopus, through a private transaction with Chairman and CEO Hiroshi Yamada and members of his immediate family, writes Fergal Ringrose. Thomson Grass Valley VP Strategic Marketing Jeff Rosica said the intention was to buy the remaining Canopus shares through public tender on the Japanese stock market.

"Our objective is to achieve 100% [ownership] of the company," Rosica said. "Once we reach 90% we will de-list the company" from the Tokyo stock exchange. Assuming Thomson is successful, the total value of Canopus would be approximately Euro 91 million.

Rosica said the two companies have complementary products and channels, with very little overlap. Canopus is particularly strong in the ProAV market, which Thomson sees as a key opportunity. Total Canopus revenues for the 12 months to August 31 2005 were Euro 50 million. Rosica said Thomson would hope to grow that revenue to Euro 70m in 2006 and Euro 100m by 2008.

Canopus is a Japanese company employing 255 people, 194 in Japan. In addition to offering PC-based digital and HD video editing systems, it is a supplier of video encoding/decoding technology and digital media conversion technologies. Over half its revenues currently come out of Japan, with the rest split evenly throughout world regions. Obviously, Thomson is banking on its own global sales force to make significant gains in other territories once the takeover is completed.

Rosica said the original attraction was that Canopus and Thomson had very similar strategic outlooks. This deal will enable Thomson enter the desktop video editing market, and strengthen its offering in the newsroom area. Canopus has a strong R&D team and is successful in developing software-based video codecs. "Canopus is a great success story, based on its technology and very strong R&D," he said. "One plus one is more than two in this case," given the addition of Grass Valley sales and service power.

Taken with the discussions with Thalès on Thalès Broadcast & Multimedia (broadcasting and IP-TV), this transaction completes what Thomson says are its external initiatives for the Grass Valley Broadcast & Networks business. Grass Valley is an element of Thomson’s Two Year Plan, as one of ‘four primary revenue growth boosters.’ The acquisition fits with Thomson’s objectives to broaden its media and entertainment client base.

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