Rimage Expands Offerings With $52M Acquisition
Edina-based Rimage Corporation said Monday that it has agreed to acquire enterprise video communications provider Qumu, Inc., in a deal valued at $52 million.
The purchase price consists of $39 million in cash and 1 million shares of Rimage common stock-and the deal, which isn't subject to any regulatory conditions, was expected to close within 24 hours.
Rimage-which provides on-demand CD, DVD, and Blu-ray Disc publishing systems-said that the acquisition will give it a strong presence in the rapidly growing video communications market with an established partner.
San Bruno, California-based Qumu helps corporations create, manage, and securely distribute video and related content-and provides analytics on content usage. According to Rimage, Qumu competes in a $2 billion market and serves companies in banking, technology, and telecom, among other industries, along with universities and government agencies. It sells its products through a direct sales force and through premier distribution partners, including Sony and AT&T.
Qumu's revenue has grown more than 45 percent each year over the past three years, according to Rimage. Its sales totaled $10.3 million in 2010 and are expected to hit $15 million in 2011 and approximately $21 million in 2012.
“Qumu is a cornerstone acquisition for Rimage and immediately positions us as a leader in the growing market for video communications and social enterprise applications for business,” Rimage President and CEO Sherman Black said in a statement. “The Qumu acquisition accelerates Rimage's strategy to distribute live, on-demand, downloaded, and optical media content for a broad range of applications on any mobile or desktop device. This acquisition significantly expands our market to new enterprise customers and offers opportunities for cross-selling to the installed base of customers of both Rimage and Qumu.”
Qumu will be integrated into Rimage, but its operations will remain in San Bruno, California.
Rimage reported revenues totaling $88.7 million in 2010, making it one of Minnesota's 70 largest public companies. Following the Qumu acquisition, Rimage expects 2011 revenues of $86 million to $88 million and earnings per share of 42 cents to 45 cents; the company said that it expects revenues to jump more than 15 percent in 2012.