Blonder Tongue Laboratories has acquired R.L. Drake for $6.5 million is an all-cash deal. The two companies make signal processing and distribution equipment for the pay-TV industry. Certain adjustments based upon a post-closing audit of the balance sheet of R.L. Drake and other payments over the next three years could add an additional $1.5 million to the price.
R.L. Drake, which had net sales of $10 million in 2011, delivers electronic communications solutions for cable television systems, digital television reception, video signal distribution and digital video encoding.
Blonder Tongue said companies will continue to operate separate entities in two locations, Blonder Tongue in Old Bridge, N.J., and R.L. Drake in Franklin, Ohio.
Blonder Tongue provides system operators and integrators serving the cable, broadcast, satellite, IPTV, institutional and professional video markets with solutions for the provision of content contribution, distribution and video delivery to homes and businesses.
Blonder Tongue Chief Executive James Luksch said the deal would allow the companies to "maximizing synergies" in its engineering, manufacturing and marketing teams, giving customers "new and innovative products delivered to market faster and more affordably."
"A void has developed in the CATV industry leaving even the largest cable MSO's searching for companies capable of developing and delivering innovative new products," he said. "Blonder Tongue and Drake plan to fill that void by shortening the development and manufacturing cycle to deliver the most complete compliment of business and product solutions in our industry."
Blonder Tongue in November reported its Q3 sales were about $7 million, down from $9.2 million a year earlier. It reported losses of $50,000 for the quarter, 1 cent per share, compared to profits of $721,000, or 12 cents per share a year earlier. The company at the time blamed a stuttering U.S. economy, but said it's high-definition encoder business has increased substantially, adding that it likely would grow with the roll out of additional versions with alternative feature sets in the coming months.
The company also has a strong position through its Edge QAM product in the digital-free-to-guest segment of the hospitality market.
For more:
- see this release
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