The purchase of shares of a Montreal technology company by an Ontario competitor piques curiosity.
The founder and big boss of Haivision, a Montreal provider of streaming solutions, did not hide his surprise when he learned that his rival Evertz had just bought large blocks of shares in the company he directed.
Evertz revealed on Thursday that it bought shares of Haivision this week to hold a 10% stake today. The Ontario company, which is also listed on the Toronto Stock Exchange, claims to have purchased the shares of Haivision for investment purposes. Evertz is now Haivision’s third-largest shareholder.
“I’m in shock,” said Haivision founder and CEO Mirko Wicha on the phone.
“Evertz management may see this as a good investment and possibly agree that Havision is undervalued,” adds Mirko Wicha.
Evertz, whose market value is around one billion dollars, is not the first initiative of its kind.
Mirko Wicha remembers that Evertz did the same thing several years ago with another Montreal company, Miranda Technologies, before reselling said shares. Miranda Technologies was later purchased by a Missouri company in 2012.
Evertz had also acquired a minority stake in EVS, a Belgian company, in 2018, before selling the shares for a profit.
“Haivision is not for sale”
“I guess this time it could be the same,” says Mirko Wicha. This tech entrepreneur admits he doesn’t know what Evertz’s true intentions are. However, he claims to know the leaders of Evertz well and specifies that these people would perhaps like to develop a business partnership with Haivision.
But one thing is certain, he is categorical on one point. “Haivision is not for sale,” he says firmly.
All companies have value and the fall of Haivision’s stock market along with the entire technology sector for more than a year now has not gone unnoticed.
“I received a lot of calls,” says Mirko Wicha.
Vultures show up thinking they can acquire distressed companies. But Haivision is not a company in distress. We are very profitable, and growing.
Mirko Wicha, founder and CEO of Haivision
“We have just carried out a restructuring and presented our year-end results. Everything is going as planned. We are even in a very good position to increase our profitability,” continues the CEO.
Mirko Wicha’s words are in tune with his gestures. Haivision’s largest shareholder, he bought a block of company shares on the market on February 4. “I just bought shares a week ago because the company is undervalued. The stock market is a mess. It will take a year before this market comes back to life. Profitable companies will do better,” he says.
Haivision made the leap to the stock market two years ago by completing an initial public offering at an initial price of $6 when Haivision’s turnover amounted to 83 million.
The company has since made two acquisitions and, according to the CEO, sales should soon reach 135 million. The business has grown and Mirko Wicha says she doesn’t need the money. And yet, its value almost halved.
Haivision-Evertz merger?
Analyst Robert Young, of the firm Canaccord, believes that a combination of Haivision with Evertz deserves to be considered, in particular because of the complementarity of certain activities and the attractive gross margins generated by Haivision. And this, even if these margins found themselves under pressure following the acquisitions of the companies CineMassive and Aviwest.
Robert Young, on the other hand, suspects that Haivision’s board of directors would be reluctant to accept an offer lower than the IPO price, which was $6 per share.
Portfolio manager Philippe Hynes of Tonus Capital thinks a combination of Evertz and Haivision is possible. “They are in the same sector of activity and in the current market which is nervous and volatile. The microcaps of 200 million or less in market value that manage to see their price go up are those [au parcours] without a hitch. This was not the case for Haivision in recent quarters, and that is why the stock fell. »
By merging, the combined entity would first save a lot in administrative costs linked to being a public company (2 to 4 million), underlines Philippe Hynes. “Haivision generated an operating profit of 8 million last fiscal year. Saving $3 million would represent a 35% increase in profits. »
This expert now expects Evertz to continue buying shares in the coming weeks. At a minimum, he adds, this news puts some floor under the title.
Haivision’s stock ended the week at $3.46 on the Toronto Stock Exchange.