Ballantyne Strong, Inc.
(NYSE MKT: BTN), a provider of digital equipment, screens and managed services as well as specialty lighting equipment, today announced the acquisition of Convergent Corporation and its wholly owned subsidiary, Convergent Media Systems, a leading player in digital signage and content creation and distribution systems. Convergent Corporation was a subsidiary of Sony Electronics Inc.
Founded in 1980, Convergent Media Systems manages digital solutions for customers that span over 95,000 displays spread across over 22,000 locations, which are seen by more than 10 million people per day. Convergent Media Systems has long-standing customer relationships with companies such as Kroger, Safeway, and Best Buy Canada. Bryan Allen will continue to manage the Convergent Media Systems team.
The combination of Ballantyne Strong and Convergent Media Systems will create one of the largest and best capitalized companies providing digital technologies for out-of-home messaging, advertising and communication (the Digital Out-of-Home or DOOH market) and Enterprise Video Solutions (EVS), which provides enterprises with the infrastructure necessary for communication, collaboration, training and education of employees. In aggregate, the domestic DOOH and EVS markets are estimated to be more than $4.0 billion annually.
“This is a transformative acquisition that extends Ballantyne’s core expertise into adjacent markets experiencing strong growth,” said Gary L. Cavey, President and CEO of Ballantyne Strong. “Industry analysts expect the DOOH and EVS markets to grow at compounded annual rates of 26% and 16%, respectively, through 2015. With these markets being highly fragmented, there is a clear opportunity for Ballantyne to capture market share with a unique end-to-end, single source solution covering design and development of customer solutions, system integration, software, hardware, content creation and distribution, network monitoring and field services. With the addition of Convergent Media Systems’ existing customer base, we will be able to further leverage the established infrastructure of our Network Operations Center to enhance efficiencies within the combined company and provide a strong platform for continued growth. Following this acquisition, we will continue to have a very strong balance sheet, which will be a key differentiator in the DOOH and EVS markets, and will enable us to continue investing in growth opportunities going forward.”