COPPELL, Texas – Costar Technologies (OTC Markets Group: CSTI) announces its wholly owned subsidiary, Costar Video Systems, has acquired Innotech Security.
Terms of the purchase price for Pompano Beach, Fla.-based Innotech Security included $7 million in cash at closing (Dec. 29, 2016), assumption of a $2.5 million three-year, interest-free subordinated seller note and potential earn out payments of up to $6 million over three years. The company entered into a debt financing arrangement with Comerica Bank to facilitate the acquisition.
Innotech Security is a value-added manufacturer of customized video, security surveillance systems and components for major U.S. retailers, restaurant chains and public venues. The company generated approximately $8 million in revenue during 2016.
“This is an excellent fit for Costar as we combine with a highly-regarded brand in the retail video surveillance market. We look forward to welcoming the Innotech team to Costar,” says James Pritchett, president and CEO, Costar. “The combination will provide significant operational benefits and substantial synergies in many areas, including marketing, sales and product development.”
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Pritchett says Innotech’s product offerings are complementary to Costar’s products and solutions, and because Costar and Innotech serve different systems integrator and retail customers, the acquisition creates many cross-selling opportunities.
“We believe our combined sales organization will be able to expand our product penetration in existing markets and promote Innotech’s products in new markets, accelerating the growth of our sales footprint,” he says.
Costar anticipates the acquisition to be immediately accretive to earnings beginning the first quarter of 2017. DLA Piper LLP advised Costar with the transaction.
