By: Stan Lewis
Costar Technologies, Inc. (OTC Markets Group: CSTI) announced today that it has signed a definitive agreement to acquire CohuHD, the camera products and video solutions division of Cohu, Inc. (NASDAQ: COHU). The purchase price for CohuHD, including potential earn-out payments, is expected to be $10 million in cash, subject to certain post-closing adjustments set forth in the definitive agreement.
The acquisition, which is structured as an asset purchase, is subject to customary closing conditions and is expected to be completed later this week. Costar is financing the transaction with proceeds from a new
credit facility with Bank of Texas. The present CohuHD management team and other CohuHD employees are expected to join Costar following the closing of the acquisition.
CohuHD is a leading provider of video cameras and related products, specializing in IP video
solutions for traffic monitoring, security, surveillance, and military applications; and accessories such as cables, camera mounts, lenses, and data storage devices.
CohuHD is the market leader in offering high-definition video systems designed for the performance requirements associated with critical infrastructure environments, and sells to a customer base that includes corporate end-users, state and federal government agencies, original equipment manufacturers, distributors, system integrators, and value-added resellers.
In making the announcement, Costar President and Chief Executive Officer James Pritchett stated, “This is a great strategic fit for Costar as we combine with one of the most well respected brands in the industry. We look forward to welcoming the team from CohuHD to Costar. The combination will yield meaningful operational benefits, together with significant synergies in many areas, including marketing, sales, and product development. CohuHD’s product offerings are complementary to Costar’s current products and solutions, and, because Costar and CohuHD serve different channels and customers, the acquisition creates numerous crossselling opportunities. We believe our combined sales organization will be able to expand CohuHD’s product penetration in existing markets and promote CohuHD’s products to new markets, accelerating the growth of our sales footprint. With the addition of CohuHD, we expect Costar to become one of the 50 largest video security companies in the world, with more than $40 million in revenue per year.” He went on to say, “The CohuHD acquisition is consistent with our strategy of providing high quality solutions to our customers. Our customers will have access to a broader product line while continuing to receive the same high level of sales, service and support that they have come to expect from Costar and CohuHD.”
“We are very excited to be joining the Costar team and to carry on CohuHD’s 60 year history of leadership in the video camera market,” said Tom Kampfer, President and General Manager,
CohuHD Division. “Our combined resources and broader product offering will generate growth opportunities for CohuHD’s rugged, outdoor video cameras into new commercial channels, and
access to Costar’s products will enable further sales opportunities within our core transportation markets.”