* Acrodyne On the Lookout for Digital Partners
Private Financing Augers Public Offering in 1998
613 Words
4058 Characters
12/01/97
Video Technology News
(c) 1997 Phillips Business Information, Inc.
* Acrodyne Communications [ACRO] is feeling the heat from powerful
competitors Harris Broadcast [HRS] and Comark Communications, and is
making a concerted effort to level the playing field.
The Blue Bell, Pa.-based transmitter manufacturer is looking for
partners among transmission and production equipment providers
interested in providing turnkey products to broadcasters who are
converting to digital service. The effort would largely mirror
Comark's Digital Services company and Harris' broad ties to production
equipment vendors.
"We're looking to become a provider of more than just
* transmission equipment," said Acrodyne Chairman A. Robert Mancuso. "We
want to be in a position to provide turnkey services. We're forming a
series of joint ventures with companies that can provide a total
service to broadcasters."
Looking for Deals
The company has retained OEM Partners of New York to investigate
potential acquisition targets and partners. It has also formed a
relationship with broadcast systems integrator Imod.
"We're looking for a myriad of products," he said. "We don't make
antennas. We don't make transmission line. We don't make studio
equipment. We're at a disadvantage to Harris in that regard. And
Comark is part of Thomson Broadcast, so they have access to a lot of
ancillary products."
* Acrodyne also is looking to bolster its bottom line. The company
announced a round of private financing late last month aimed at
bringing $2 million into its coffers. It sold 800,000 shares (roughly
15 percent of the company) plus 300,000 five-year warrants to an
investor group consisting of Scorpion Holdings and Newlight
Associates.
Although $2 million is a pittance compared to the funding
available to market leaders Harris and Comark, Mancuso said the deal
is the first step in a plan that could lead to a public financing
round next year and could culminate in a sale of the company in a few
years.
"Over time, we could be acquired by a major player," Mancuso
said. "I think that could happen in the next five years."
Raymond Jansen, an analyst at GKN Securities, which managed
* Acrodyne's initial public offering in 1994, said the recent financing
* is key if Acrodyne hopes to attract larger investors next year.
"There are only about five or six million shares out with the new
round," he said. "At $4 per share, that is only about $24 million.
That's under a lot of people's radar screens. If he can get the stock
up, he'll get more institutional interest."
Mancuso confirmed that view to VTN, saying he needs to "bolster
the balance sheet so I could post performance bonds I need to compete
with Harris and Comark for high-power orders."
Stemming the Flow
* Acrodyne saw a net loss of $442,000 ($0.09 per share) in the
third quarter ending Sept. 30 on sales of $2 million, compared to a
loss of $241,000 ($0.06 per share) for the period a year ago. In all
of 1996, the company had a net loss of $1.22 million on sales of
$10.42 million.
With literally hundreds of transmitter contracts up for grabs
over the next few years, it will take a strong organization to meet
the demand.
"(Mancuso) has to show that he has the financial strength to
execute, say, five transmission orders at nce," Jansen said. "While
he's at the size he's at, probably $14 million a year, he's bleeding.
If he gets a $3 million order that needs to be completed in 60 days,
he won't be able to fill it."
* Mancuso said Acrodyne will stick with the Diacrode for its tube
transmitters because he doesn't want the company to be an also-ran in
the IOT space.
He added that he doesn't expect to become a market leader in
* high-power systems. (Acrodyne, 215/542-7000; GKN, 212/509-3800)
I0607 * End of document. |
