Sonic Foundry, Inc. (NASDAQ: SOFO), the trusted leader for video content
management and webcasting
solutions, announced today that the company has entered into non-binding
term sheets to purchase the remaining shares of stock in Mediasite K.K.,
and to acquire MediaMission, the market leading enterprise video
providers in Japan and the Netherlands. With these agreements, Sonic
Foundry expects to significantly expand its global market reach in the
Asia-Pacific region and Europe, and accelerate the company's commitment
to enterprise video communications world-wide.
Sonic Foundry saw a 43% growth in billings in Japan and a 25% growth in
international billings overall in fiscal year 2013. The company believes
the acquisition of Mediasite K.K. will highlight operational synergies
of the combined organizations by bringing a larger geographic and cloud
footprint; allowing the company to better align with customers globally;
providing follow-the-sun customer support; and further driving global
sales.
The worldwide market for enterprise streaming solutions totaled $574
million in 2012 and is poised for continued growth, according to
Wainhouse Research. The analyst firm projects the market will expand at
a compounded annual rate exceeding 20% for the next five years with
total annual revenues for enterprise streaming solutions passing the $1
billion threshold in 2016.
Mediasite K.K. is a Sonic Foundry partner, and a company Sonic Foundry
has had a minority ownership interest in since 2001. In 2011 the company
received the Japan e-Learning Award from the Ministry of Education,
Culture, Sports, Science & Technology for innovations in using
webcasting solutions for cancer education along with Tsukuba University.
In addition to higher education, Mediasite K.K. also has built a strong
and successful corporate and events customer base, including the second
largest pharmaceutical company in Japan, Otsuka Pharmaceutical Co Ltd.;
Sanofi K.K.; Nippon Steel Sumitomo Metal; Ernst & Young ShinNihon;
Hakuhodo Inc.; Toshiba Solutions Corporation; and Mazda Motor
Corporation, which has been using Mediasite since 2006 to strengthen
internal communication.
“We looked for a system that would enable employees to easily operate
with minimum maintenance requirement. That was Mediasite,” said Kazuo
Niide, Office Systems Infrastructure System Department, Mazda Motor
Corporation. “We were very impressed with the simple design and ease of
operation. Now many employees use Mediasite for communication purposes.”
"I am so pleased to reach the agreement with Sonic Foundry,” said
Shuichi Murakami, Chairman of the board of Mediasite K.K. "The
management consolidation with Sonic Foundry allows us to increase
customer satisfaction, expand our support capabilities and foster
greater adoption of video technology."
“Mediasite K.K.’s success in bringing video applications to a growing
number of customers is testament to the upward momentum of big global
trends in enterprise video management. The company complements our
existing strategy to enhance communication through the power of video,”
said Gary Weis, Chief Executive Officer, Sonic Foundry. “Mediasite K.K.
has long been a valuable partner to Sonic Foundry, and I personally
compliment Shuichi Murakami and his team for their success in the
Japanese market for more than a decade.”
Terms
Sonic Foundry will pay approximately ¥585 million ($5.85 million) for
the remaining stock in Mediasite K.K., comprised of equal components of
approximately $1.95 million cash, subordinated note payable in one year
and value in shares of Sonic Foundry. Mediasite K.K. recorded revenue in
their fiscal year ended March 31, 2013 of ¥791 million or $9.6 million
using the average conversion rate during the year, and pretax income of
¥163 million or $2.0 million. Had the acquisition of Mediasite K.K.
occurred at the beginning of their fiscal year, Sonic Foundry would have
recorded additional revenue of $8.2 million, after eliminating Sonic
Foundry sales to Mediasite K.K. Additional details can be found in Sonic
Foundry’s Annual report on Form 10-K, which will be filed in December.
The transaction, which is subject to execution of a definitive stock
purchase agreement and customary closing conditions, is expected to
close within the next 90 days.
Investor Webcast
Sonic Foundry will discuss this announcement and its acquisition of
MediaMission during its quarterly investor webcast today at 3:30 p.m.
CT/4:30 p.m. ET. To access the presentation, go to sonicfoundry.com/earnings.
An archive of the conference call will be available for 90 days.
About Mediasite K.K.
Mediasite K.K. is a strategic partner of Sonic Foundry and the sole
distributor of Mediasite in Japan. As market leader with over 250
customers, including 100 from higher education, Mediasite K.K.'s mission
is to demonstrate the power of enterprise video creation and management
to more organizations in Japan.
About Sonic Foundry®, Inc.
Sonic Foundry (NASDAQ: SOFO) is the trusted market leader for enterprise
webcasting solutions, providing video
content management and distribution for education, business and
government. Powered by the patented Mediasite
webcasting platform and webcast
services of Mediasite Events, the company empowers people to advance
how they share knowledge online, using video webcasts to bridge time and
distance, enhance learning outcomes and improve performance.
© 2013 Sonic Foundry, Inc. Product and service names mentioned herein
are the trademarks of Sonic Foundry, Inc. or their respective owners.
Copyright Business Wire 2013