Rimage Corp., a leading provider of on-demand CD/DVD/Blu-ray Disc™ publishing systems, today announced that it has signed a definitive agreement to acquire enterprise video communications provider Qumu Inc.
Rimage will pay $52 million for the acquisition, which will provide Rimage with a solid presence in the video communications market as the company has established relationships with 100 Global 1000 customers. Notably, Qumu revenues have increased more than 45 percent per year over the past three years.
“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,” Sherman Black, president and CEO of Rimage stated in the press release. “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 sells its products through a direct sales force to banking, technology, telecom, universities and government agencies, among others. Revenues for 2010 totaled $10.3 million, and the company said it is on track to achieve approximately $15 million in 2011. Qumu is expected to generate approximately $21 million in revenue in 2012.
“As a result of the Qumu acquisition, Rimage is positioned to generate double digit top line growth in 2012. Overall, we anticipate cash from operations in 2012 to match the level of cash generated in 2011. Given our expected cash position post-acquisition and our confidence in generating overall growth in 2012, we believe a 70 percent dividend increase is warranted,” Black stated.
Qumu will be integrated into Rimage, enabling Rimage to offer its customers a suite of solutions for all content distribution applications across multiple platforms, including the desktop, smart phones and tablets.
“We are extremely excited to be joining forces with Rimage to more quickly extend Qumu’s unique video communications solution to a much larger market,” Ray Hood, president and CEO of Rimage stated. “We believe the combination of the two companies offers significant opportunities for growth in 2012 and beyond. Our optimism is demonstrated by the desire of our investors to take a portion of the purchase price in Rimage stock.”
Per the acquisition agreement, Hood will remain the leader of the Qumu team and will become senior vice president of Rimage.
For more information visit www.rimagecorp.com
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