Fail / Fail: The IQinVision - Vicon Merger

By: John Honovich, Published on Mar 31, 2014

One was a leader 20 years ago. The other a decade. Both have fallen far in recent years.

The solution? Merge.

****** ****** ******** ***** and ***** ** ***************************** ** *****.

** **** ****, ** break **** ***** **********, valuation *** ****** *** the ******** *********.

Financial *****

***** *** ****** ** complete********************** **** *** **% of *** ******** *******, with * *** ****** ********* ** ~$** million ***(*.*., ****'* **.*% **** than ********'* $*.* *******).

*** ********* ****** ******** 2013 ******* ** $** million ***. ***** *****'***** ********** $**.* *******, **** puts **********'* ** $**.* million.

***** ***** ** ***** ratio ** ******** ** nearly * / * ($15 ******* ****** *** / $** ******* *******). A ******** ******* ** this ******** *** * ratio ** * ** 1 ***** ****** ********* are ***** *:* ** even *:*. **** ***** the ****** *** ****** faith ** ***** ******* to **** *** ******** profits.

*************, **** ******* *** company ** ***** ****** at **** **** $** million, **** *********** *** company's ********** ******* *** valuation.

Merger *****

**** ****** *** ******** detailing *** ****** *****.

*************/ ******

***** *** ********* **** significant ****** *** *****. For ********, ** ****, the ******* *** ** operating **** ** $* million.

************* *** *** ********** as **** **** ******* and **** **** *** last *** *****, ******** with *** ******** ******** to ****** *.***, ******* to***** ********** *******, ** ***** **** never *********.

**** ********* ******* ** down *******. *** ********,******** ** *** ** less **** $** ******* annual *******, *** ***** of ****** $** ********* ****.

******

*** ****** *** **** grim *** ***** *** years. ***************** ***** ******* ** ** **** to *** **** ** will **** ***** **** its **** *******.

*** ******** ** ***************** ****** ****** *********** and ********** **** *** elderly *****. *** *******, ******'* ************ ******** *****,**************** * ******** ***** average **% ************* *** ** *** lowest ** *%. ***** we ***** **** ****** ask **********, **** ******** ***** exists ************.

** *** ***** ****, the ** ****** ******** has ****** * *** more *********** ***** **********'* prime * ** * years ***, *** **** have **** * *** of ***** *** ****** as ****.

*************, ** ** * disappointing ****** ** * very ****** *********. ********, **** ** * last ****** ** *******.

******

***** ** ** **** to ******* *** ******** company **** ****** ***** former ***** ** ******** close, ***** ** ******, primarily ******* *** *******'* valuation ** ******** ***.

** *** ******* ***** simply ********* ******, ******* to *** ***** ***** it ********* * ****** profit **** ******** ***** to ***** ******* ******** $56 *******, ***** ****** valuation ***** ****** ** triple.

Comments (16)

Oh, hey, I remember Vicon.

Oh, and Vicon is looking for a new CEO. So if you want a challenge, there's that...

The valuation for Vicon alone is $15.9 million according to its stock price today. I don't understand why the valuation for the two companies combined are only about 15 million.

Fisher, good question.

As of the time of this comment, there are 4.5 million shares outstanding, trading at $3.52 for a market capitalization of $15.9 million USD.

As of the beginning of this year, Vicon has ~$8 million USD cash in the bank. They are going to issue a one time dividend of 55 cents to existing shareholders (4.5 million shares). That will be a cash outflow of $2.5 million.

IQinVision shareholders will get 4.5 million new Vicon shares, increasing total Vicon shares to 9 million. There is no other cash changing hands.

The news has been public for the past day (and known by insiders for some time). However, the stock price was unchanged today and has been in the same range for the past month.

When those shares are issued (doubling), it will dilute current Vicon shareholders. The valuation will depend what happens when those extra shares are issued.

The valuation will depend what happens when those extra shares are issued.

To the degree that this is viewed as a 'done deal', the current valuation already has already 'priced in' the announced future issuance; Likewise the actual issuance of shares will have no effect at that time, agree?

That's my interpretation but I could be wrong.

Either way, best case scenario, the two combined are worth $30 million, which is still dreadful...

Two sad stories about once innovative companies.

What happened at Vicon? How did the end up where they are today?

Is it because they were not prepared for IP. Because their solution doesn't work or buggy software or ???

In fairness, many, if not most of the leaders of the past era have struggled in this one. Pelco, AD, Interlogix, Dedicated Micros, etc.

Vicon's fall has been more public primarily because it is an independent publicly traded company so it's easy to see the specific decline.

It's not all doom and gloom. Maybe I'll be able to finally dump my nearly worthless IQinVision stock I've been forced to hold on to for years.

In my humble opinion, if there are funds available a CEO with a strong vision could still create a recovery once the companies have been stabilized. Never say never - it's a dynamic marketplace.

Hate to sound like a cynic, but it seems these days when there are funds available CEO's usually worry first about bonuses and golden parachutes. A good indicator of their intention would be to look and see if they are buying or selling shares themlseves.

I agree Luis, many CEOs put their own needs above those of the company and shareholders. However this sort of job has risk for all parties including the new CEO. His first responsibility after obtaining adequate compensation and incentives for himself should be to preserve and then grow shareholder value; to ensure that people in the company are motivated to succeed and in essence it's his job to remove barriers to their success - obtain capital, intellectual resources and have a strong vision. Without success in capital markets as well as technical markets there is little hope for any company. Perhaps 'realist' rather than 'cynic' is a better description of your position :)

It will be interesting to see how this all shakes out, and what the end result will be

Any idea yet how this is fairing a year later?

Work in progress. They hired a new CEO 6 months ago and he is implementing a lot of changes. Still needs more time to get a clear sense of how well it will work.

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