CNB Company Shakeup

By: John Honovich, Published on Aug 29, 2013

Korean company, CNB, is one of the larger analog manufacturers specializing in OEMing to large Western conglomerates as well as selling their own budget line products. Now, CNB is going through a major shakeup, with a significant change in ownership and the acquisition of a rival. In this note, we break down what is happening.

CNB Background

2012 revenue was ~$87 million USD, down notably from ~$110 million in 2011 and less than 2009 revenue of ~$98 million.

CNB offers analog, HD IP and HD SDI but has not really distinguished itself in either HD area, especially as Taiwanese and Chinese rivals have made significant inroads (e.g., Dahua, Hikvision, Viviotek).

CNB Financial Moves

CNB has acquired 51% of iCantek, which is another Korean manufacturer, primarily an OEM. CNB paid ~$3 million for that stake. iCantek reported 2012 revenue was ~$9 million, making it far smaller than CNB.

However, CNB's official acquisition report indicates the reason was to strengthen their IP camera offerings. We do not know how specifically this will work.

Additionally, and perhaps more important, our sources indicate, and a public filing notes, that there has been a change in the largest shareholder. The founders have sold to a private equity fund.

One source familiar with the Korean market suspects that the board became tired of internal issues and declining profits, opting to change control. In particular, iCantek is seen as having strong engineering resources for IP cameras, a valuable asset to compliment CNB's depleted staff.

Future?

While Korean manufacturers have historically been viewed as having higher quality than their Chinese and Taiwanese counterparts, the surge of newer entrants has increased competition for CNB. It will be interesting to see if these recent financial moves can help CNB regroup and better compete for HD camera sales.

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