Belden acquires Grass Valley video company
February 11, 2014
Grass Valley, formerly known as Grass Valley Group, a Nevada City LLC specializing in TV-broadcast equipment, is being purchased by Belden, an international investment firm specializing in the broadcast market, for $220 million.
"We completed the signing of the offer late last night," said Tim Lenze, with Belden's investor relations department. "It's a binding offer, still subject to customary closing conditions and regulatory approvals.
Belden indicated in a news release on the acquisition that it intends to combine Grass Valley with Miranda, another telecom firm purchased by Belden in 2012. The combined companies will still be doing business under Grass Valley's name, a widely known brand in the industry.
Belden expects the $220 million deal to be completed by the end of March, but that depends upon financial audits and approval from the Grass Valley USA's foreign labor works council.
“You do not purchase a company like this and then let go of your key asset. In technology, that’s your employees.”
Nevada City Mayor Sally Harris
As of deadline Thursday, it remained unclear what this move might mean for the firm's local workers and the local business community. Belden said in its prepared statement the purchase should allow for expanded product portfolios and reduced complexity, while increasing functionality and ease of setup for customers.
But there may be plans to downsize the company's workforce.
The Union asked spokesman Tim Lenze if layoffs were in the company's future.
"To achieve our stated financial goals, certain actions may be required," Lenze said. "That includes leveraging a combined sales and marketing function, and implementation of lean principles."
Lenze declined to offer a timeline for any potential layoffs. In February 2012, at least 34 Nevada City employees were to be laid off by the video manufacturing firm, according to a memorandum from Nevada County CEO Rick Haffey to the Board of Supervisors on support services available to those laid off from work.
Previous attempts by The Union to verify employment issues with Grass Valley, a private company, have been unsuccessful.
"Activities that occur within the company are a normal course of business," a company spokesperson told The Union in January 2012 when longtime senior vice president of global operation Dave Perillo was replaced by Gale England amid talk of layoffs.
In 2009, Grass Valley had nearly 300 employees at its Nevada City facility, according to a former employee. Following a 10 percent reduction, the company had around 270 employees in 2011 in Nevada City, the employee said. In July of that year, Grass Valley disclosed plans to outsource final assembly and testing operations to Jabil Circuit, which has locations all over the U.S., South and Central America, Europe and East Asia.
Last year, Grass Valley's employer class size was between 100 and 249 employees, according to California's Employment Development Department.
Belden's purchase of Grass Valley will impact the local economy, area officials said Thursday, but to what degree remains to be seen.
"I think a lot will depend upon what their plans are," said Lisa Swarthout, Grass Valley city councilwoman and chairperson of the Economic Resource Council. "This is probably the third acquisition of the original Grass Valley Group over the last 10 years. Every time they've been sold they downsize."
"The impacts could be huge if the parent company decides they don't want to have an operation here," Swarthout added.
Grass Valley was purchased by Francisco Partners, a San Francisco-based investment firm, in 2011. It was originally founded by Donald Hare in 1959 as the Grass Valley Group and is still often referred to simply as "the Group" by locals.
French media technology group Thomson acquired Grass Valley Group in 2002, but facing rising debt sold the company, which has pioneered many video-related technologies. At the time of the 2011 sale, Grass Valley held at least 400 patents and had earned more than 20 Emmy Awards.
Nevada City Mayor Sally Harris called Grass Valley a key member of the business community, based on the high quality jobs and tax revenue it brings to the table — as well as significant civic contributions made over the decades since the company was launched.
Harris said she has a background in the tech-industry and suspects that any possible layoffs would be unlikely to affect the local workforce.
"You do not purchase a company like this and then let go of your key asset. In technology, that's your employees," Harris said. "In my experience there are some redundancies when companies consolidate, but they tend to be on the administrative and support sides. I would include sales and marketing in that."
"I think a lot of what goes on here is on the technical side," she added. "It would be my hope this won't affect Nevada City too much."
Harris said Grass Valley has also been an important partner in establishing local hiking trails along Deer Creek.
The firm gave Nevada City 40 acres of open space along the creek as part of a deal to develop its headquarters within city limits. That project required rezoning some of the land, and part of the deal involved a local point of sale which generates tax revenue for the city.
Contact staff writer Dave Brooksher by email at firstname.lastname@example.org or by phone at 530-477-4230.
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