SAN JUAN CAPISTRANO, Calif. — Vicon Industries and IQinVision have entered into a definitive merger agreement that is expected to create a global provider of integrated solutions to the video security market, the companies announced today.
Vicon is a publically held provider of video security and surveillance systems. Privately held IQinVision designs and produces high definition (HD) megapixel IP cameras.
The merger has been approved by the boards of directors of both companies and is subject to Vicon shareholder approval, among other customary closing conditions. The transaction is expected to close in Vicon’s September quarter.
Under the terms of the agreement, Vicon will issue shares of Vicon common stock to IQinVision shareholders in an all-stock merger whereby IQinVision shareholders will own approximately 50% of the outstanding common stock of the combined company. After the merger, Vicon will have approximately 9 million shares outstanding.
Vicon expects to declare a special cash dividend of $0.55 per share payable with respect to shares of Vicon common stock held by shareholders of Vicon as of a record date prior to the completion of the merger and payable to such holders within 15 days after the completion of the merger.
According to a press release, both Vicon and IQinVision’s product portfolios will retain their existing branding, and both companies will continue to sell into and service their existing channels and customers. Customers will see no difference in sales, service, and support levels compared with prior to the merger.
“Together, with the Vicon line of HD megapixel robotic dome cameras, our enterprise class video management software, ViconNet and IQinVision’s highly regarded IQeye brand, we bring a compelling solution offering to the video security market,” said Ken Darby, Vicon chairman and CEO. “The IQinVision transaction is consistent with our strategy of providing high quality, proprietary solutions to our customers. The Vicon/IQinVision combination will yield meaningful operational benefits, together with significant market and technological synergies. It’s a logical first step to strategic growth for both companies.”
Darby, who has delayed his retirement, will continue to lead the company until his successor is named. The search for a new CEO was recently restarted.
“This is a great fit for IQinVision as we combine with one of the iconic brands in the industry,” said Charles Chestnutt, CEO of IQinVision. “Our product offerings are complementary to Vicon’s solutions, and we believe Vicon’s worldwide sales organization will effectively promote the IQeye brand to new markets and accelerate the growth of our sales footprint.”
For the twelve months ended December 31, 2013, IQinVision and Vicon combined generated $56 million in revenue, according to the press release. Following the merger, the board of directors of the combined company will consist of three directors designated by Vicon and three directors designated by IQinVision. TM Capital Corp. and Imperial Capital acted as financial advisors to Vicon and IQinVision, respectively.