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Thomson Grass Valley Vows to Acquire Canopus

Company officials cite synergy in craft editing and codecs, sales channel in Japan as motivation By Charlie White

Thomson Grass Valley acquires CanopusThomson Grass Valley signed an agreement to buy Canopus in a deal estimated to be worth $107.6 million. The company bought a third of Canopus from the companys founder Hiro Yamada, and will launch a tender offer for the other two thirds of the company on December 6, 2005. In a teleconference, Thomson vowed to acquire 100% of Canopus and integrate it fully into Grass Valley. The company emphasized the strong editing capabilities of Canopus products and its advanced codecs and research and development as the most compelling reasons for the purchase.

Canopus is a Japan-based source of digital video and graphics hardware and software for broadcasters and video professionals, as well as prosumers and video enthusiasts. Through its Edius line of editing products, the company offers a variety of both software and hardware editing systems. The company is also known for its advanced codec technologies, including DV codecs, MPEG products and, of particular interest to Thomson, its HDV codec which will add the ability to ingest and edit the new low-cost high definition format to the Thomson Grass Valley line.

Marc Valentin, left, president of the Grass Valley business within Thomson seals the deal with Canopus Chairman and CEO Hiroshi Yamada in Tokyo on December 5, 2005.

Canopus, a publicly traded company, was founded in 1983 by Hiro Yamada, whose initial product was a CPU add-on card. Canopus now employees 255 people, with just fewer than 200 of them located in Japan. Thomson officials didnt say whether any of those employees would be laid off, but noted that the management structure of Canopus would remain intact with Yamada staying in charge of the Canopus business, as well as continuing to control the research and development arm of the company.

Thomson is expected to retain the Canopus name currently associated with the companys various editing products. ?We actually place quite a lot of value in the Canopus brand, said Laura Barber-Miller, Vice President of public information at Thomson Grass Valley. ?We will definitely continue to advance and leverage that within the Grass Valley portfolio. As the integration proceeds quickly over the next few weeks, well also take a look at some other some brands, but definitely we see a lot of value in that Canopus brand, so youll see it locked with Grass Valley going forward. 

Canopus Edius is available as a software-only application or a hardware and software combination. In its most powerful form, it's capable of uncompressed high-definition editing with numerous effects. Edius NX is capable of HDV editing.
Grass Valley sees benefits to its news production products in the new acquisition. The company has a basic news editing product but lacks a more effects-intensive ?craft editing combination of hardware and software in its line of products. Jeff Rosica, vice president of marketing technology and business development for Grass Valley said, ?Combining the two companies will create an integrated end-to-end news production workflow which is important to broadcasters. This will give them the tools they need from craft editing all the way through to the hard-news editing, all integrated in one solution from one manufacturer. This is obviously a salvo aimed at Avid, the industry leader and editing powerhouse which has such a system already in place. When asked whether this acquisition would put Grass Valley in a head-to-head battle with Avid, Rosica answered, ?Yes, I would say especially from a news standpoint, he replied. ?Obviously, today we believe we have a better solution from a hard-news standpoint, but clearly this gives us a strong craft editing product and so I would say in the broadcast environment this clearly continues to strengthen our position in the competitive situation with Avid in the news area, Rosica added.

Besides the Canopus editing products that appeal to Thomson, company officials also noted Canopus software transcoding products of various compression codecs were also a factor in the decision to acquire the company, as well as its video conversion software, scan conversion products, and PC board-level MPEG encoding products. Thompson also mentioned Canopuss product called MediaEdge2, a video distribution device utilizing IP networks, as another attractive element of the acquisition.

Thomson Grass Valley's NewsEdit is the centerpiece of the company's mostly-cuts "hard news editing" system.
Beyond those hardware and software lines, Thomson also needed a bigger presence in the Japanese market, where the company intends to combine sales organizations in that country to better serve customers there. A further advantage, in addition to the complementary technologies of the two companies are the sales channels which they said create a nice fit in both directions. By acquiring Canopus, Thomson said it can now double its addressable market, which also helps the company to have better access to the video editing market as well as build a better portfolio for ProAV markets. Company officials are optimistic about these prospects, expecting revenues for the Canopus division to be worth $77.7 million in 2006, and predicting a $118 million market for Canopus products in 2008.

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Related Keywords:Thomson Grass Valley, Canopus, Hiro Yamada, advanced codecs, research and development, edius, craft editing, NewsEdit, HDV codec

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