SYDNEY, AUSTRALIA: Audinate Group Limited (ASX:AD8) has signed an agreement to acquire the video business of Silex Insight SA, based in Belgium.

The Silex video business produces video networking products for manufacturers of AV equipment.

The acquisition will include an existing team of 8 engineers with extensive video implementation expertise and average tenure of 16 years; an existing revenue base of approximately US$2.5 million from a range of products including video codec IP Cores, Viper Board, Video ASSP and design services; three video compression technologies; and, intellectual property related to the video business.

The acquisition of the Silex video business is strategically compelling because it complements Audinate’s existing video capabilities in Cambridge UK and aligns with Audinate’s strategic vision for video over IP.

In particular, the transaction will increase video FPGA expertise, enable acceleration of the video product roadmap, and cement critical mass for video engineering in Europe.

The acquisition consideration comprises of an up-front cash payment of US$6.5m, representing approximately 2.3 times expected revenue for the financial year ending 31 December 2021; revenue earn-out of up to US$1.5 million may be payable based on the uplift in revenue for the twelve-month period from acquisition date

The transaction consideration reflects the challenging supply chain environment which has currently impacted the Silex video business, like most of the AV industry. Component shortages are expected to curtail revenue for the first half of calendar year 2022, albeit a strong order book is ultimately expected to translate into revenue as supply chain pressures ease.

The proposed transaction is expected to complete on 31 January 2022, subject to the achievement of conditions precedent standard for this type of transaction, including relevant Belgian regulatory confirmations and assignment of contracts.

Silex Insight Chief Technology Officer Jean-Marie Cloquet commented: “I am delighted that the Silex Insight video team will be joining Audinate with this transaction.

The Silex team brings significant expertise in video compression, hardware, and AV system design that will complement the software expertise already in place with the Cambridge, UK team. In combining Audinate’s dominant position in Audio over IP with the Silex video heritage we are strengthening the foundation that will enable us to build the future of the AV industry.”

Audinate Group Ltd (ASX:AD8) was founded with a vision to pioneering the future of AV. Audinate’s award winning Dante audio over IP networking solution is the worldwide leader and used extensively in the professional live sound, commercial installation, broadcast, public address, and recording industries. www.audinate.com