Arecont Files Ch.11, Agrees To Sell To Turnaround Specialist

Author: John Honovich, Published on May 14, 2018

The long-anticipated sale of Arecont Vision is finally happening. After raising $80 million in debt in 2014, a failed sale in 2017 and the resigning / ouster of Arecont's founders a month ago, Arecont has filed Chapter 11 to restructure its debts, having reached an agreement to sell the company to a turnaround specialist.

In this note, we examine the founder's significant mistakes that created this situation, Arecont's sharp decline in revenue, and how the planned sale could help the company stabilize and potentially recover.

*** ****-*********** **** ** ******* ****** ** ******* *********. ************ $** ******* ** **** ** ****, ******* **** ** ******* ************ / ****** ** *******'* ******** * ***** ***,******* *** ***** ******* ** ** *********** *** *****, ****** ******* ** ********* ** **** *** ******* ** a ********** **********.

** **** ****, ** ******* *** *******'* *********** ******** **** created **** *********, *******'* ***** ******* ** *******, *** *** the ******* **** ***** **** *** ******* ********* *** *********** recover.

[***************]

What **** *****

*******'* ******** ****** ******** ******* ** ****, ****** *** ******* debt ** **** ** **** **** ***** *** *********. ******* a *********** ** ******* ** *** ****-**** ******* ******** *** the **** ** *** *******, *******'* ******* ******** **% ** 2017. ******* ** ****, ******* *** ** ****** **** ** pay ***** ***** *** **** * ***** **** ***** *** them ****** ** ***** **** **** ***** (***** $**+ *******).

What *** - ********** **********

** *** ******** **** *** *******, ******* *** ****** ** sell *********** *******, * ******* **** *********** ** ******* ****** ********* *** hit **** ********. *** **** ** **** **** **** ****** them ** *** ***** *********, ***** ********* *********, ********* *** 2014 **** ******* *** ******* **** *******/****** ** **** ********** around.

Bidding ******* - ********* *** ******** *** ***

** **** ** *** ******* ** **************, ********* ** **** with *** *******'* ********* ** *** **** *** **** ****, there **** ** * *** ******* *** ****** *** ***** be ********** ** *******. *******, ***** ** ********** ****** ******* contacted **** *** ********* ******* ** *** **** *****, ** is ********, ****** ********, **** ** ******** ***** ***** ******.

* ******* *****, ******* ****** **** ***, ** ******** ***** *** ****** ******* ******** *** ******* buyers, ********** ********* ** *** ******* ***** ***********.

Source *********

******* ******* ****** ******** ***, ** **. ****** ********** ****** ********* ** *** ******* ** ******, ******** ******** ********* ********* ************* ******* ** ******** ******* * **** ** ******* *** equity *******.

Revenue **** **** $** ******* ** $** *******

*******'* ******* **** **** $** ******* ** **** ** $** million ** ****, * **** ** **** **% **** **** year. ******* ******* ********* ******* ******** *********, **** ******* *** **** $** ******* ********. **** **** * **** ****** (**** - ****), ***** net ******* ****** *** ~**%, *** ***** **** *** ******** average.

Owe $**+ *******

*** ******* **** ******* **** $**+ *******:

**** ** ****** ******** *** ***** ************ *************, ** **** loan *** *********** ** **** **********, **** ********* ** *** benefit ** *** ******** *** ************.

Key *********

*** ****** **** ********** * ****** ** *** ***** ******* customers:

*******, *** ****** ** *** ** ***** ******** *** *******, e.g., ***:**** ****** ******* ******* *** ** ******

Blame ****** ** ******* + **** ******

*** ******* ***** *** ******* ***** ** *** ******* *** the *** **** ********* (*********** ** *******'* **** ********):

** ******* *** ******* ******************* ** ******.

Blame ** ******* *** ********* ******

***** *** **** ** ******* ************* *********** *** ******** ***** Western ************, *** ********* ******* ************* (**** ** ********* **** Axis *** ********) **** ********* ** **** ******* ****. ** contrast, *******, *** *********** **** ****** ** ********** *** ***** experience ******,****,***********, **** **** *** *** ******** *** (*** ******) ******* management ******* ** **** ** *********, ******** ******* *******.

More ***** ** *** **** ****

*** ******** *** ******* ** ***** *** *** **** **** which *** ** ********** *********** *******, ** *** ****** ****** explains:

******* **** ****, **** ** *** *** ***** ******** **** made, ***** ***** **** **** ** **** ** *** ******** or ** ****** ** *** **** $** ******* **** ** the *******'* ******* ******* **%. **** ** *** *********** ******* of ****** **** ****.

Headcount ****** **%

** *** **** ****, ******* *** *** *** ********* ****** 50% ** ****** *****:

Founders ****** ***

***** *** *********, *** '**********' ****** *********** ***, ** ***** ******** **** *****:

For **** - *** ******* *********

**** *** **** *****, *******'* ****** ******* ******* ** *** parties:

Arecont ******* ****** ** *******

***** *********** *********** *** ***** *** *****, ******* ******* ********** itself. *** ****** ** ***** *** ***** ************ *** ******* had **********, **** *************, *** **** **********. *** **** **** they ***** *** **** *** ***** ***** ******** ** ***** own *****. ********* **********, ****** **** ****, **** ** *** ** ***** *** themselves.

Future - ****** **** ******

*** **** **** *** ******* ** **** ******* *** ******** were ** ***** *** ** ****-********* **** **** *** ** addressed *** ***** (******, *** ******** *** ******* ***** *** is **** *** ******). *** *********, ******, ** **** ******* 11 ************** *** ****** ** ** ****** ** * ********** specialist **** **** ** *** ********* *** ********* *********.

** **** ********** **** ** *** ******* ******** ** *** next *** ****** *** ****** **** *** **** ** *********.

Poll / ****

Comments (32)

** *******'* ******, **** **** *** ******** ********** ** ********* resolution *** *****-****** *********. **** *** *** ****** ********* *** less *********.

**** **** **** **** **** ******** *********, ***** **** ***** "American ****" *** ***** * ***** ******** *******/******* ******* ***** through *** *****, **** *** **** *****.

**** ***** **** ******** ******* **** ***** ***** ****** ** those?

**** **** **** **** **** ******** *********, ***** **** ***** "American ****" *** ***** * ***** ******** *******/******* ******* ***** through *** *****, **** *** **** *****.

***? :)

**** ***** **** ******** ******* **** ***** ***** ****** ** those?

** ***** ******* *****, *******. ****'* * ****** *** **** asking * *** **** * ****** **** ** *** * marathon. *** **** ********* ******** ** *** **** *** ********** to **** *****. ** **** ***** ** ****, **** **** consider ******* *** **** ***** **** ** ***** *** ******.

*** **** ********* ******** ** *** **** *** ********** ** walk *****.

**** ****. ********* ***** *********** ******** "*******" * ****** ***, and *** *** ** ** ******* *********... **** **** **** a *** ** ******** ** ** **.

****'* ** *** *** ******** **** * ****** ** * child *** ** ******* ****.

"*** ** *** **** ** ******* *** ***** * **** you *** *** ***** ****? **** *** *** ** ** show ** * *** ***** *** *****?"

****** ********** **** ** **** ***** ** ***** ********, * don't ***** **'* *** **** **** * ************. **** ***** they ** ** **** *** **** ** **** *** **** again?

Lifetime ********?

****, * ***'* ****** ** **** ********* ***** *** *** says *** **** ** **** ***** * ********. *******, *** went ******* *******.

Lower ****?

****, *** *** ***** **** **** **** ********. **'* * little **** ** **** **** ***** *** ** *** ****.

Name ***********?

(*** *****)

* ****, ***** **** *****!

**, **** *** ***** *** :)

**** ******** *******:

*** *******, **, ****** ******, *** **, **** /************.***/ --******* ******®, *** ******** ****** ****-***** ********* ****** *** ***** ************ *********...

"******** ******" *** "********** ******" *** ** *** ***********. ***** it ** **** **, *** **** ********* ***** ***** ******** where **** *** ** ******** ********** ** *** "*******" ** things **** ****, ** ***** ** ***** **** *** ******** but "*******".

**** ***** ****. ****** ***** **** *** ***** *** *** the ****** ** **** ********* ********, ************ **** ** ** easy ** *** **** *** ******* ** *** **** ** the ******* **** *** *** ******** *** * "******". (* am ****** **** *** **** ** *******).

*** ***** ** **** **** ** ** ****** *******:

******* ****** *** ** ******* ***** ******** ********* **** ** Affiliate ** ********* ******* ********, *** ** **** **** ****** Through ******* ** ****; ********** *** ******** ******* ** ******** Uninterrupted***** ******* ****** * *** ***** ** ******

* ** **** **** **** ******** ************ ******.

*** **** **** ****** ******** ******* **********? * ****, **'* not **** **** **** ** ***, *** **** ** ****?

*** ******* ** *** ***** *** ** ********. ** *** an ********* ** **** ** *****. ** * ***** ****** warranties ** ** *******.

**** ******* ****** **** **, ** ******, * **** ****** question, *** **** ** **********, *** *** ******* *********.

****** ** **-***** ********* *******....***? * **** ** ******* ********* and **** ***** *** ****** ** ** ********* ****** ***** in *** ** ***** ******. **** **** * ****** **** a ****** ***, ****'** **** ******* *** ****** *** **** a **** ******* *****.

****** *** "**** ** ***" ****** ******* ******* * ******** factor **** *** ***** ****** *****, ***** **** *** *****. Maybe *** ***** **** *** **** ** ***** ******* *** be ******* ** ********* ** * **** ** ******* **** there. *** ***. **** **** *** * ****** ** ******* to *** **** ********* * ***** ****** ** **** *** they *** ********** ** *********** ** *-* ***** *** *** ended ** *** ******. **** ** **** ******* **** *** want ** **** *** *** ******* *** ******** *** **** an *** ********.

* ***** * *** ******* ** *** **** **** ** I ***** ** ** ********* ** ********** *** **** ** leading ** **** *********:

*** ******** *** ******* ** ***** *** *** **** **** which *** ** ********** *********** *******, ** *** ****** ****** explains:

******* **** ****, **** ** *** *** ***** ******** **** made, ***** ***** **** **** ** **** ** *** ******** or ** ****** ** *** **** $** ******* **** ** the *******'* ******* ******* **%. **** ** *** *********** ******* of ****** **** ****.

* ****** *** *** ********** ***** **** **** **** ****?

* ******** ********** **** ******* **** ******* ************ *** ******* and *** ******* ***** **** ******** *** ******* ************. *************, the ******* **** **** ***** ***** ******** ***** ****** ** time *** ***** ** **** **** *** *** ***********. *** knows! ***** ** ***** ***** ***, ****** *** ***.

***** *** *********** ** *** ***** ***** ****** **** ******** to ** ******** ******* **** ************** **** *******. * ***** a *** ******** ** ** *****.

***** ******* *** ****** ** *** ** *********** ******* (****). *********'* ******* ******* ** ********* *** *********** **** ******* **** **** ** ** ****** (i.e., **** ** *** **** ****** **** ******), **** ** to **** ***** *******'* **************.

******** ***** ******** ***********:

(*) ** *** ********** ****** ****** ***** ******* *** ******* in ******* ***** ******* *** ***** ********** '*** **********':

(*) ******* **** **% ** **** *** ** *** **** Schafer *** ****** ** ******* ****, ******* **** **** ***** deep ********:

(*) ******* *** *** ****** **** *** **** ** *****, *********, ******* *** *******. *** ******, **** *** **** again, *** ** ******* **** ********** *** *****.

*** *****, ******* *********** ********** ** **** ***** *******'* *******, Schafer ******* **** ****** (**** ***** ** *** **** ** people **** **** ******* ****). *** *** ****** ***** *** take **************.

* ***** ****** ******* *** ******, ** ****, ** *** midst ** *** ***** *** ********* ********* ** ***** *** go **** *** *****, ******* *** *** ***** ****. ****** are *****, ****, ****, ****.

**** ******* ** ******* ** *** ** ******* ****'* ****** on******* ******* ****** *** ** ******:

******* ** *** ******* ********** ******** ** ******** *********. ** warned.

****: * **** ** **** **** * ********** ***** ** highlight ** *** ***.

******: **** ******* *** **** ***** ** *** *** **********:***** ******* ************** ** *** **** ** *******

******* ** *** ******** ********* ** **** *** ** **, so *****’* ***** *****.

;)

****** ****: ***'* *** ** *** ** ***** **** *** past **** ********. ** **** *****'* **** ** **** *** so **** *** ******. **** ** **** ******* **** **** Mike *******! ;-)

** *** ***********, * ********* **** ********** **** **** ***** talk ** ** **** * **** ** ********* ** **** giving ** '** *******' ********** **** ***** ** ********* *** ***** ** ** ** not *******. ********* * **** *********** **** * ******* ** lying, ****** ******* ** **** ****** **** ******* ** ******* information **** *********** *** *******. ******, * **** **** *** the ***** *** **** **** ****** *****. ***, **** **** does ******, * ** *** *** ***** ******* ** ***. Moreover, ******** ****** **** ** ** **** ********* ** ******** than ********, ** ********** ***'* ********** *** ************ ** *********.

*** *** **** ****'* *** *** ** *** **** ** friendly ***** *** **** **** ******* ******** ******* ****** *********** it. *** * *****, **** ******** **** **** ****** ** heavily ***** ** **** **********. ** *** **** ****, *** might ** **** ** ** ********* ****.

**** **** **** “*** *** ******” ****** ****, ***** ** why **** *** *******.

********* (** ***), **** ******** *** *** **** ***** *** in ****, ** ** ***** ***. ** ***** ******** **** Arecont **** *** * *** *** ****. *** ******* **** is **** **** **** ****** **** * "********** ******" *** from ******* *** ******** ********, ***** ***** ** ******** **** Arecont ********** ** *** **** ** ******** ******.

***** ****** ***** ** ****** *******'* ***** *** *** ***** low-end ******* ******** *** *** ****** *** ********** *** * strong ******.

* ***** ***** **** ******* ********** **** **** *** ** some ***** ******* ****** *** **** **** ** ***. **** may **** **** ******* ****** ********* ***** ******* **** **** new *****-******* **** *** **** ******* ********** (*.*. *** **** FPGA-based ********) *** ***** ******, *** * ** *** *** them ****** *** ****** (***********, ************** ** *********) ** ***** turn *** ******* ****** **** * *****-***** ******.

*** ***, * **** ****** **** *** **** ****** ** their ***** ** ***** *****.

**** **** ** ****** **** *** ****.

**** ** *** ******* ** *** ***** ******** ** ******* around **** ********** ?

**** ** *** ******* ** *** ***** ******** ** ******* around **** **********?

**** ********. * **** *** ******** **** ****** ************** *** generally ******** (******** **************, *****,***,**,********, ***. *** *** *** ** ** ****), *** **** are ******* **.

***** *** * *** ********* **** ***** ****:

  • ******* *** ** *** ********** ** ***. *** ***'* ******* if *** ****** *** ****** *** ******** *** ***** ** charge. ** **** *****, ******* *** ****, ****** *** ******** is ******* ** ** *** ****.
  • ******* **** **** ******** ******* ** **** ********** ********* *** operationally *********** **** *****. ****** *** *** *** *** ** bad ** ************* ** **** *** *********** ******* ** *** 2014 **** ****. *** ********** ****** *** *** **** ***.

*** *******, ** **** ********, *** **** *** ******* ****. But ** ********* **** *** ********* *** ********* **** *** gives ******* ****** ******* ** *********, * ***** **** *** survive.

******'* * ***** ********** ** *****?

***** **** ***** ****** *** **** ******* ******** *** **** the *****.

***** **** * ********** ******** ****** ** *** ** **** it ****** **** *********.

** ****, **** ***** **** ** ******** ******* ****** ******** either * ********* ** ******.

***** ****** ** **.

******* *** **, *** **, *** *****-******, *** ************** *****-*******. The ******* ********* ** ****. *** ******* ******. *** ******* issues. ***** *** *** ********.

* ***** ***** **** **** *******, *** ***** *** ********** got ****** ** *** **** **** ** *** ***** **** to ***** ** **** ********** *** ******** ******.

*******'* ********* ** *****, *****, *** ***'* **** ****** **** fast ******.

*****-****** ** ** * **** * *****, *** ****** *** credible ******* **** * ****** ******* ***.

**** ** "****" ***'* ***** ** **** ****. *** ***, we ***** **** *** ******* *** ******* **** ** *****.

**** **** * ******** ******, *** *********** **** ***** ** be **** ****'** ********** ** **.

******* *** ********** ******** *** ******** ****** **** **** ********.

********, ** ****'* ** ********, *** * ***** ***** ****** a **** *** (*****'* "******" **** **) ** * ********** facsimile *******.

******** ********* ****. ****** ***** ** * ***** **** ********, but ***** *** ******* ** **** ** ****** ******* **** new ********** **** *****.

**** ********* ******* ***** ***** ********'* ***** *** ****. **** paid ****** *** **. ***** ************ **** ****** *** **.

***** ********* ***** ** ** ********* ****... **** **** **** if **** ******.

**********, *'* *******.

** *** *** ***** ** **** ******** **** *** **** this ***, ** ** ****.

* ****** ******* ***** **** ***** *** ************ ********** ****** old ****.

**** *** ******* **** ***’* **** ********* *** **** *** eventually ** ******* ******* **** *** ****** ***** ********* **** awarded, **** ***** **** **** ** *** *********** **** ***’*.

******** ******** ****** ** ***** *** ****, ** **** ** Vertical ** **** ********* **** *********.

**** **** ****** ******** **** ** ****, ** **** ***** to **** ***** ************* **** ******** **** **** *** ******** and ******* *********** ************ **** **** **** ** *********?

*** *** ******* *** **** *** **** :)

******* **** ******* $** **. ** ****

********? :) *** ******* ** *****'* *** ***** (****** ****** Hikvision ** ****** **** ****** **** ****):

“******* ****** **** ******”

***’* *** ** ***** ** * ****** ******!

****** **** *** ******* ***** *** ***** $*** **** *** probably ******* ***** **** *** ****** **** ***.

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