Rimage (RIMG) to Acquire Qumu in $52M Deal, Updates Outlook Following Transaction
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Price: $10.50 --0%
Financial Fact:
Income before income taxes: -2.52M
Today's EPS Names:
NLY, CP, RUSHA, More
Financial Fact:
Income before income taxes: -2.52M
Today's EPS Names:
NLY, CP, RUSHA, More
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Rimage Corporation (Nasdaq: RIMG), has signed a definitive agreement for the acquisition of Qumu, Inc., for $52 million, consisting of $39 million in cash and one million shares of Rimage common stock. The transaction is not subject to any regulatory conditions or shareholder approvals and is anticipated to close within 24 hours.
Qumu’s revenue has increased more than 45% per year over the past three years. In 2010, it generated $10.3 million in revenue and it is on track to achieve approximately $15 million in 2011. Based on current opportunities and expectations, Qumu is expected to generate approximately $21 million in revenue in 2012.
With the acquisition of Qumu, the Company now expects 2011 revenues of $86 million to $88 million and earnings per share of $0.42 to $0.45. Excluding fourth quarter Qumu revenue and Qumu transaction and restructuring costs of $2.0 million, both revenue and earnings per share are in line with the financial guidance provided last quarter and at the beginning of 2011.
For 2012, the Company expects Qumu annual revenue growth to continue at greater than 40%. It also anticipates that Qumu will contribute slightly to cash flow in 2012. In disc publishing, the Company expects continued solid execution and cash generation. Technology substitution and softness in the retail segment will continue to negatively impact 2012 revenues and will only be partially offset by growth in disc publishing solutions and geographic expansion. The Company expects disc publishing revenues to decline in the low single digits over this period and to be able to maintain low double digit operating margins.
Overall, Rimage revenues are expected to increase more than 15% in 2012. The Company will continue to optimize its expense structure in disc publishing and leverage the Rimage global infrastructure to accelerate the Qumu opportunity.
Qumu’s revenue has increased more than 45% per year over the past three years. In 2010, it generated $10.3 million in revenue and it is on track to achieve approximately $15 million in 2011. Based on current opportunities and expectations, Qumu is expected to generate approximately $21 million in revenue in 2012.
With the acquisition of Qumu, the Company now expects 2011 revenues of $86 million to $88 million and earnings per share of $0.42 to $0.45. Excluding fourth quarter Qumu revenue and Qumu transaction and restructuring costs of $2.0 million, both revenue and earnings per share are in line with the financial guidance provided last quarter and at the beginning of 2011.
For 2012, the Company expects Qumu annual revenue growth to continue at greater than 40%. It also anticipates that Qumu will contribute slightly to cash flow in 2012. In disc publishing, the Company expects continued solid execution and cash generation. Technology substitution and softness in the retail segment will continue to negatively impact 2012 revenues and will only be partially offset by growth in disc publishing solutions and geographic expansion. The Company expects disc publishing revenues to decline in the low single digits over this period and to be able to maintain low double digit operating margins.
Overall, Rimage revenues are expected to increase more than 15% in 2012. The Company will continue to optimize its expense structure in disc publishing and leverage the Rimage global infrastructure to accelerate the Qumu opportunity.
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