Cohu HD Surveillance Manufacturer Acquired

By: John Honovich, Published on Jun 05, 2014

One company has quietly doubled revenue in the last few years. The other company is a specialist in ruggedized, long distance surveillance.

In this note, we examine Costar's acquisition of Cohu HD, including the deal terms, financial details of the acquirer and potential growth opportunities.

Costar Overviewed

If you have never heard of Costar Video Systems, despite their $26 million USD revenue in 2013, do not feel bad. The company does little marketing and has a nearly non-existent brand.

*** ******* *** ******* doubled ******* ** *** last *** *****. *** other ******* ** * ********** in **********, **** ******** surveillance.

** **** ****, ** examine ******'* *********** ** Cohu **, ********* *** deal *****, ********* ******* of *** ******** *** potential ****** *************.

Costar **********

** *** **** ***** heard ******** ***** *******, ******* ***** $** ******* *** ******* in ****, ** *** **** bad. *** ******* **** little ********* *** *** a ****** ***-******** *****.

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

*******, ****** *** * big ********* ** ***-**** and *******. *** *** of ***** ********* ******* for ~**% ** ******'* revenue.

***** *** ******* **** they '*******' *** '************' products, ** ******* **** are ****** ** *** / *** / **-********. Their ***** ******* *** incredibly *** (~**% ******** to **** ************* ********* 45% ** **%) *** they ** *** ***** out *** ******** ** R&D. ****, **** **** that *** **** ******** accounts *** ~**% ** purchases, ******* **** ** relabeling / ********* ***** products.

******'************ ****** ******* *** ** cameras *** ******** *****. There's ** **** ******** products ** ***********.

Cohu **

****** **/*** * ******* of****, ***, * ******** ****** company ********** ~$*** ******* in ****** *******. *******, CohuHD, ***** ****** / surveillance ********, **** *********** a ******** ** ***** business, ** **** ** the ********* ***** *****:

******* ** ****, ** ******* that **** ***. *** not ***** / ********** the ****** ******** ************.

******* ****, ****** *** ~$15 ******* ** **** revenue **** *************** ******* ****, ************** **** ***** ** *******, * *** ************ *********** ***** ** 80C *** * ******* ** IP67 ********** *** ******.

The ***********

*******, **** ******* ****** *** ~$** million, ***** ** ****** low *** * $** million ********, *** ***** than *******'* ******* ***** to ***** ***** (* meager *:* **********).

****** *** ** ******* this **** **** *** debt, ** **** **** insufficient **** ** *** bank ** *** *** Cohu *** **** **** a ******* ****** ************** themselves ** ~$** ******* USD.

The *********

**** ** * ******* combination. *** ******** *** no *********** ********** *************** and * ***** ************ customer **** ** ******. The ******** **** **** *********** technology *** *** *** industrial / ********* *******.

*******, ****** *** ***** they *** **** *** they *** *** ****** much *** ****** ******** to *** ******* *** products. ** **** *** execute ** ******* ******'* portfolio, **** ****** ** new ****** ********, ** could ** * *** for **** *** ** is * ******** *********** for ******.

Comments (5)

They may be pushing to capitalize on their retailer connection using Cohu as the port security video of choice. The retailer owns the security level compliance of the manufacturers they use and shipment transhipment points throughout the supply chain, or did when I had that responsibility. Cohu builds very specialized products for the CTPAT and secure port initiatives.

Since WM buys predominantly on lowest price and Costar has only 2 substantive clients, I wouldnt want to have any personal investment in Costar. That road is littered wtih corpses.

No personal investment at any price? Just Blue Chips and Trip Aces all the way? What investment road is not littered with corpses? Don't keep it just for yourself..

Depending on his portoflio, the poster may be seeking a certain risk/return balance and, though it remains to be seen if there is value in this equity, there is undoubtably risk, and so it personally may not fit his profile. In other words, Jack Sink won't sink jack. Not into Costar at least.

Finally, although you are correct fallen investors lie everywhere, there is a difference between walking around corpses and stepping over them.

This is a bit off topic, but I could not find an appropriate recent discussion. My apologies.

Can HD-SMI cameras from different manufactures be mixed on the same HD-SMI machine? Has anyone ever tried this? Thanks.

Mark, I created a new discussion / explanation here: HD-SDI Vs HD-CVI Vs HD-TVI Vs HDcctv?

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