Days before InfoComm opened mid-June in Las Vegas, one of the world’s leading projection video purveyors announced the acquisition of one of the lighting industry’s most well known brands. Barco’s purchase of High End Systems further solidifies the ongoing convergence between video and lighting and in the process seeks to redefine what had been individual sectors under the rubric of the events market. High End Systems, Inc. was majority-owned by Generation Partners, a U.S. private equity firm, which acquired the company in 1998. The $55-million move is a good fit for both companies. An estimated 80 percent of High End’s annual revenues — $44 million in 2007 — come from the rental and staging markets, a sector that Barco dominates when it comes to LED video displays, large-venue projectors, creative LED products and image processing. The acquisition also provides Barco with an additional patent portfolio in the digital lighting market, along with increased distribution channels for product offerings globally. The acquisition further strengthens Barco’s market position in North America, a stated strategic goal of the Belgium-based projection and LED specialist, and gives the publicly traded company an opportunity to roll out the High End Systems product portfolio globally.
“The advantage of the merger is that now for both product portfolios, additional market potential opens up,” comments Chris Colpaert, the Barco executive given the title of vice president of creative lighting and the mandate to integrate the companies’ product lines and cultures. “Barco was traditionally very strong in the video segment and weaker in the lighting segment, something illustrated when we introduced our Creative LED (CLI) line including MiStrip and MiTrix. We were very successful with our video customers, but we hoped for faster adoption in the lighting industry than we experienced. If I look to High End Systems’ customer base, the same seems to be true for their products, but reversed: good penetration in the lighting industry, but slower adoption in the video segment. Bringing the two companies together opens up opportunities in each company’s markets.”
There are nuanced nuts and bolts to this corporate fusion. The High End brand isn’t going away any time soon, assures Colpaert. As with the acquisition of Folsom Research four years earlier, the brand will be slowly integrated into the larger Barco umbrella to give High End customers a sense of continuity. “Folsom is now called Barco Folsom, and while the company is now fully integrated into Barco, we don’t expect to ever fully retire the Folsom brand,” Colpaert says. As with Folsom, which was based in Sacramento before becoming fully integrated in the larger company, Colpaert says High End’s R&D, executive and manufacturing assets will remain in Austin for the immediate future. With the exception of High End CEO Frank Gordon, who has departed, all 156 High End employees will remain on staff there.
But the mechanics are in place to support the larger imperative of industry-wide consolidation. As if to underscore that trend, the newly combined systems designers and integrators AVI and SPL held a press Q&A at InfoComm concomitant with announcing their own merger, which makes them one of the world’s largest companies of that type. Colpaert acknowledged that merger and agrees it’s a trope for the future course of the events and staging business. “It’s not just products but channels to markets that are converging,” he says. “This extends the customer base for both brands with very little overlap.”
The overlap he refers to is in the digital lighting domain: the DL.3 from High End and the DML-1200 from Barco, which won an InfoComm Award for best product. “The DL.3 focuses more on the corporate events market,” Colpaert explains. “It has a powerful software tool, a high-contrast optical engine and high-definition projection lenses, all to allow high-quality multi-screen soft-edged projection. It also runs at 110V/240V, which is a key advantage in the corporate events market. The Barco DML-1200 focuses on the touring and theatrical market. It is a high-brightness digital light, with key elements of a light, including CMY color changers when used as a light, an RGB color wheel when used as a projector, and a hybrid combination, with the RGB color wheel with on top of the CMY color changers.”
Colpaert hinted at new products resulting from the synergy of the acquisition but says it’s too soon to discuss them, though he adds that the time frame could be within months for some of them. “Everything is going to move forward based on the pace of the market,” he says. “And if the pace of convergence continues to be as quick as it seems to be now, I think we’ll have to move pretty fast.”
Phil Gilbert can be reached at pgilbert@plsn.com.
