Key Points
- Audinate shares on the move as Silex Insight video business now integrated
- Upfront cash payment of US$6.5 million, with another US$1.5 million incentivised payout
- Company scheduled to report its half-year results on 14 February
The Audinate Group Ltd (ASX: AD8) share price is rebounding during early Tuesday afternoon. This comes after the company provided an update on the recent acquisition of a Belgium-based video business.
At the time of writing, the media networking solutions provider's shares are swapping hands for $8.17, up 2.25%.
What did Audinate announce?
In a statement to the ASX, Audinate advised it has completed the acquisition of the Silex Insight video business.
Founded in 1991, Silex Insight produces video networking products for manufacturers of AV equipment.
The purchase of the Silex video business will allow Audinate to accelerate its strategic vision for integrated audio and video over IP. In particular, this will add breadth and depth to its AV-over-IP product lineup.
The latest addition is expected to increase video hardware engineering capacity, accelerate video product roadmap, and cement critical mass for its European video engineering team.
The total consideration of the acquisition comprises an up-front cash payment of US$6.5 million (A$9.2 million). Furthermore, this is a revenue earn-out of up to US$1.5 million (A$2.12 million) if there's an uptick in revenue over the next 12 months.
Audinate noted that component shortages are anticipated to constrain revenue for the first-half of the 2022 calendar year. Nonetheless, a strong order book is expected to translate into revenue as supply chain disruptions are resolved.
Audinate CEO Aidan Williams provided an update on the company's outlook, saying:
We are very excited to acquire a team with widely recognised video hardware expertise and an existing revenue base. The video codecs and deep product expertise in the team, in combination with our Dante networking technology, will enable us to go to market with a variety of full-service video offerings.
This acquisition complements the video software skills in the Cambridge (UK) team we established earlier in the year. Together these two deals significantly enhance our video capabilities and know-how – outcomes that have been achieved in only twelve months, notwithstanding the challenges presented by COVID.
The company is scheduled to report its first-half results for the 2022 financial year on 14 February.
Audinate share price snapshot
Over the past 12 months, the Audinate share price has returned almost 15% to investors. However, when looking at the year to date, its shares are down around 7% in value.
Based on today's price, Audinate commands a market capitalisation of roughly $632.97 million, with approximately 76.96 million shares on issue.
