Sonic Foundry Agrees to Acquire Japanese Enterprise Video Company, Mediasite
One of two announcements that reinforce company’s international market
leadership in video communications
MADISON, Wis. -- November 21, 2013
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
“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.”
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.
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
© 2013 Sonic Foundry, Inc. Product and service names mentioned herein are the
trademarks of Sonic Foundry, Inc. or their respective owners.
Sonic Foundry, Inc.
Tammy Jackson, 608.770.9052
Nicole Wise, 608.237.8678
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