CONTACT: Scott Switzer

June 4, 2014 Chief Financial Officer

Costar Technologies, Inc.

(469) 635-6800

 

 

 

 

 Costar Technologies, Inc. Announces

Definitive Agreement To Purchase CohuHD

Camera Products Division From Cohu, Inc.

Acquisition Expected to Expand Products
Offerings and Accelerate Sales Growth

 

Coppell, Texas – June 4, 2014 – Costar Technologies, Inc. (OTC Markets Group: CSTI)

announced today that it has signed a definitive agreement to acquire CohuHD, the camera

products and video solutions division of Cohu, Inc. (NASDAQ: COHU). The purchase price for

CohuHD, including potential earn-out payments, is expected to be $10 million in cash, subject to

certain post-closing adjustments set forth in the definitive agreement. The acquisition, which is

structured as an asset purchase, is subject to customary closing conditions and is expected to

be completed later this week. Costar is financing the transaction with proceeds from a new

credit facility with Bank of Texas. The present CohuHD management team and other CohuHD

employees are expected to join Costar following the closing of the acquisition.

 

CohuHD is a leading provider of video cameras and related products, specializing in IP video

solutions for traffic monitoring, security, surveillance and military applications; and accessories

such as cables, camera mounts, lenses and data storage devices. CohuHD is the market leader

in offering high-definition video systems designed for the performance requirements associated

with critical infrastructure environments, and sells to a customer base that includes corporate

end-users, state and federal government agencies, original equipment manufacturers,

distributors, system integrators and value-added resellers.

 

In making the announcement, Costar President and Chief Executive Officer James Pritchett

stated, “This is a great strategic fit for Costar as we combine with one of the most well respected

brands in the industry. We look forward to welcoming the team from CohuHD to Costar. The

combination will yield meaningful operational benefits, together with significant synergies in

many areas, including marketing, sales and product development. CohuHD’s product offerings

are complementary to Costar’s current products and solutions, and, because Costar and

CohuHD serve different channels and customers, the acquisition creates numerous crossselling

opportunities. We believe our combined sales organization will be able to expand

CohuHD’s product penetration in existing markets and promote CohuHD’s products to new

markets, accelerating the growth of our sales footprint. With the addition of CohuHD, we expect

Costar to become one of the 50 largest video security companies in the world, with more than

$40 million in revenue per year.”

 

He went on to say, “The CohuHD acquisition is consistent with our strategy of providing high

quality solutions to our customers. Our customers will have access to a broader product line

while continuing to receive the same high level of sales, service and support that they have

come to expect from Costar and CohuHD.”

 

“We are very excited to be joining the Costar team and to carry on CohuHD’s 60 year history of

leadership in the video camera market,” said Tom Kampfer, President and General Manager,

CohuHD Division. “Our combined resources and broader product offering will generate growth

opportunities for CohuHD’s rugged, outdoor video cameras into new commercial channels, and

access to Costar’s products will enable further sales opportunities within our core transportation

markets.”

 

Costar is being advised in connection with the transaction by Alston & Bird LLP.

 

About Costar Technologies, Inc.

Costar Technologies, Inc. develops, designs and distributes a range of security solution

products including surveillance cameras, lenses, digital video recorders and high-speed domes.

Costar also develops, designs and distributes industrial vision products to observe repetitive

production and assembly lines, thereby increasing efficiency by detecting faults in the

production process. Headquartered in Coppell, Texas, Costar’s shares currently trade on the

OTC Markets Group under the ticker symbol “CSTI”.

 

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, as

well as assumptions, that if they never materialize or prove incorrect, could cause the results of

the Company to differ materially from those expressed or implied by such forward-looking

statements. Forward-looking statements generally are identified by the words “expects,”

“anticipates,” “believes,” “intends,” “estimates,” “should,” “would,” “strategy,” “plan” and similar

expressions. All statements other than statements of historical fact are statements that could be

deemed forward-looking statements. These forward-looking statements include, among other

things, statements regarding markets for our products and our performance in those markets,

our business plans, product performance and impact, competitive offerings, impact and benefits

of the transaction including potential synergies to be achieved, the transaction’s impact on

Costar’s sales and other financial results and the timing of the transaction’s closing. These

forward-looking statements are based on our beliefs, assumptions and estimates using

information available to us at the time and are not intended to be guarantees of future events or

performance. The risks, uncertainties and assumptions include developments in the

marketplace for our products, competition, related products and services and general economic

conditions, as well as other risks and uncertainties. If our underlying assumptions turn out to be

incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from

the expectations and projections expressed or implied by our forward-looking statements.

These factors, in some cases, have affected and in the future (together with other factors) could

affect our ability to implement our business strategy and may cause actual results to differ

materially from those contemplated by the statements expressed in this press release.

Accordingly, we cannot give assurance that any of the events anticipated by the forward-looking

statements will transpire or occur, or if any of them do so, what impact they will have on the

results of operations or financial condition of Costar. As a result, readers are cautioned not to

place undue reliance on any of our forward-looking statements. We disclaim any intention or

obligation to publicly update or revise any forward-looking statements to reflect any change in

our expectations or in events, conditions or circumstances on which those expectations may be

based, or that may affect the likelihood that actual results will differ from those contained in the

forward-looking statements. This cautionary statement is applicable to all forward-looking

statements contained in this press release.

# # #