Showing faith in Grass Valley Group's product development and market position, a group of investors led by global bank Lazard has provided over $36 million in new equity to GVG.
Terms of the financing were not released, although Dr. Terence J. Gooding, executive chairman of GVG, added some of his own money.
Company President/CEO Tim Thorsteinson says that the much-needed equity funding will enable the $200 million per year company to fulfill its plans for newer, cheaper products; in addition to strengthening its balance sheet
and structure of the company.
"This new capital allows us to keep investing 20 percent of revenue back into the company," he says, " and also make sure that products get to markets properly, particularly in some of the newer markets."
The money will not, however, put an end to the 10 percent pay cut management and its employees have been forced to take since January. "We're in the middle of a technology recession, so whether or not we continue with pay cuts is dependent on operating performance, not so much on the balance sheet of the company," Thorsteinson offers. "To have a strong business long-term, you still have to operate in the black."
He also claims that over the past three years, GVG has invested nearly $100 million in R&D to revamp its switcher, server, router, and modular
product lines. - Mike Grotticelli