March to acquire Cieffe
OTTAWA--March Networks, a provider of IP video and business analysis applications, announced in late January an offer to acquire Italian IP surveillance manufacturer Cieffe, for a total package worth roughly $30 million in cash and stock, with an earn-out component that could equal another $15 million in cash.
Cieffe did about $15 million in revenue for 2007.
Ken Taylor, March's chief financial officer, said Cieffe is attractive on three central fronts. First, it is "very strong in Europe and the Middle East," he said. "We're very strong here in North America, but have had limited success so far in cracking into that market." For that reason, March will retain the Cieffe brand for a while before transitioning to the March brand.
Secondly, Taylor said, "they have a very strong suite of IP cameras, award-winning technology," that is complementary to the March line. Which leads to the third attraction: The Cieffe line has had success in the commercial/industrial market, "and we have had some success there," said Taylor, "but most of what we do is in retail and banking, so, again, that's very complementary."
Finally, it was important, Taylor said, to retain Cieffe's founder and CEO, Fabrizio Colciago, who will continue as managing director and lead the ongoing evolution and growth of the Cieffe product line within the Europe, Middle East and Africa region. The stock and earn-out portions of the deal are dependent on his remaining with the company for two years.
"He's young, he's energetic, and he wants to stay with the business," said Taylor, who also noted that he's been vital to Cieffe's product development.
"My permanency here is a testimony of continuity," Colciago said. "I'll keep doing things at my best. I'll look for new solutions to improve IP video surveillance today and tomorrow. The goal is big growth in the market."
He was interested in selling to March, he said, because "Cieffe needed to be stronger at the international level in order to compete ... We have never competed against Italian companies but with international giants. That's why we needed a structure to widen our technological leadership position and become market leaders."
Current Cieffe dealers are the big winners, he felt. "It's a big deal for them," he said. "It means a wider offer, integrated turnkey solutions, and a better vendor network to assist them. There's now a big, solid group behind them."
Taylor said he expected the deal to go through by the end of March, at which point the companies will begin operating as a unified operation, and, he said, "I think in terms of our product breadth, we're one of the top companies" in IP video.