Espial’s acquisition of Bluestreak will help ramp its visibility, says Euro Pacific
By
Nick Waddell
The pickup of Bluestreak Technologies will bring greater attention to Espial (TSX:ESP), says Euro Pacific Canada analyst Rob Goff. Yesterday, Espial announced it will buy the Montreal-based Bluestreak, although terms and condition were not disclosed.
“Bluestreak brings software expertise and experience integrating leading over-the-top services. These capabilities will enhance Espial’s RDK and HTML5 solutions, which also blend linear television with Web-based video services,” said CEO Jaison Dolvane. “Bluestreak’s MachBlue product line is complementary to Espial’s G4 Client solution, providing rich media services across operator set-top box platforms, smart TVs and multiscreen devices. We will work closely with Bluestreak customers on enhanced solutions and services which give them a competitive advantage.”
Goff says Bluestreak’s existing network of legacy technology customers in the cable TV ecosystem will bring greater attention to Espial, and it gives the company the opportunity to sell its RDK/HTML solution to Bluestreak’s clients.
“The acquisition of Bluestreak Technologies adds to the ongoing professional services build-out at ESP, ” says Goff. “With Bluestreak engineers on board, ESP is set to benefit from the STB software development and system integration experience. As noted, the acquisition adds engineering headcount in Montreal and France (Paris). We are encouraged by the ramp in capacity dedicated to meeting requirements at existing contracts. We believe that a tight execution on initial product rollouts is paramount. The lack of operational shortfalls is set to reverse risk (company size) typically assigned to companies of ESP’s size. With those fears mitigated, ESP is better positioned for incremental cable TV contract wins.
In a research update to clients today, Goff maintained his “Buy” rating and one year target of $5.10 on Espial.