Technology supplier IDC, which has seen its share of business challenges in recent years, should soon have a new parent.
International Datacasting Corp. will merge with another Canadian firm, Novra Technologies. The transaction is expected to close by June 15.
IDC makes technologies for radio and audio markets including audio distribution, content management, encoders and receivers. Its STAR Pro Audio ad insertion technology is used by radio networks to distribute broadband multimedia content over satellite. The company is headquartered in Ottawa.
Novra Technologies specializes in the transmission and reception of IP traffic over satellite, cable and terrestrial communication links. It is based in Winnipeg.
IDC has struggled financially in recent years and has been hurt by customer concerns over the company’s financial stability, according to its public financial reports. For FY2015 the company’s total revenues were $10.3 million, a 37 percent decrease from the prior year. “The decrease in revenue was mainly due to the non-renewal of the Canadian Forces Radio and Television broadcasting contract, which ended on March 31, 2014,” according to the IDC regulatory filings.
IDC earlier had an agreement to sell its product portfolio to Pico Digital in 2015. However, IDC shareholders later rejected that deal.
Both are traded on the TSX Venture Exchange, a public venture capital marketplace. The deal calls for Novra to acquire all issued and outstanding common shares of IDC in a deal valued at approximately $1.9 million. The purchase is for 1 cents in cash per share; one Novra common share for every 10 IDC common shares; and one Novra warrant for every five IDC common shares. According to a report in the Ottawa Business Journal, IDC officials are more confident of shareholder support for the Novra deal. A shareholder meeting is scheduled for May 30.
“We believe this merger creates a company that will optimize value for our shareholders and provide significant opportunities for our employees,” said Steve Archambault, CFO and interim CEO of IDC in the announcement. “Additionally, the combined complementary product and solution offerings will enable us to provide a broader range of products in order to better capitalize on the market opportunities for servicing the world’s premier broadcasters in radio, video, digital cinema and data networks.”
International Datacasting Corp. was founded in 1984.