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Morgan Stanley Private Credit Leads $220 Million Recapitalization for Grass Valley

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Morgan Stanley Private Credit leads a $220 million recapitalization for Grass Valley, a media technology company, to enhance its balance sheet and invest in software and hardware solutions. Grass Valley aims to revolutionize live production workflows with its advanced cloud-native media platform, the Grass Valley Media Universe.
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The $220 million recapitalization led by Morgan Stanley Private Credit for Grass Valley represents a substantial infusion of capital into a prominent media technology company. This move indicates a robust confidence in Grass Valley's potential to expand and innovate within the live media and entertainment industry. From a financial perspective, the recapitalization is poised to enhance the company's balance sheet, which could result in improved credit ratings and lower cost of capital. The emphasis on investment in software and cloud-native media platforms aligns with current industry trends towards digital transformation and SaaS models, which are known to offer scalable and recurring revenue streams.

Grass Valley's reported earnings increase and revenue growth are significant indicators of the company's performance and market position. An earnings increase of over 100% and a near doubling of revenues, with a notable rise in recurring revenue, suggest operational efficiency and a successful adoption of the AMPP SaaS Platform. Investors should note the potential for long-term growth driven by the company's strategy to invest in integrated hardware and software solutions, which could lead to increased market share and customer retention in the evolving live production and networking infrastructure sectors.

Grass Valley's focus on the Grass Valley Media Universe (GVMU) and the AMPP SaaS Platform is a strategic move to capitalize on the growing demand for flexible, cloud-native deployment models in media production. The media and entertainment industry is undergoing a significant shift with the integration of cloud-based technologies, which allows for more agile and cost-effective production workflows. Grass Valley's investment in these areas suggests that they are not only adapting to this shift but are aiming to be at the forefront of it.

From a market perspective, Grass Valley's expansion into integrated hardware and software solutions could position the company as a one-stop-shop for live production needs, potentially increasing its competitive edge. The increase in hiring globally also reflects the company's commitment to scaling operations and enhancing its service offerings. As the industry continues to transition, Grass Valley's ability to provide comprehensive solutions across live, networking, content production and playout workflows may drive customer preference and loyalty, which is critical for maintaining and expanding market presence.

The media technology sector, particularly live production solutions, is highly competitive and rapidly evolving. Grass Valley's recapitalization and subsequent investment in the AMPP SaaS Platform suggest a strategic pivot towards cloud-native and hybrid deployment models, which are increasingly preferred for their scalability and flexibility. The AMPP Platform's open ecosystem approach is particularly noteworthy, as it allows for interoperability and customization, which are highly valued in the media technology landscape.

Furthermore, the emphasis on software solutions over hardware indicates a shift towards service-oriented revenue models, which can provide more stable and predictable income streams. This could be a response to the challenges posed by the commoditization of hardware in the tech industry. Grass Valley's ability to innovate and integrate its offerings with current and emerging technologies, such as artificial intelligence and machine learning for media analytics, could further solidify its market position during this industry-wide transition period.

Recapitalization will accelerate growth and lead the reimagination of workflow for media technology provider after a promising 2023

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Private Credit (“MSPC”) announced today that several of its investment funds have led a $220 million recapitalization for Grass Valley, a leading media technology company that provides end-to-end solutions for the live media and entertainment industry. This strategic transaction will strengthen the company’s balance sheet and further accelerate investments in software and integrated hardware solutions as part of one of the most advanced cloud-native media platforms in the industry.

Grass Valley is helping to lead the future of live production solutions by enabling streamlined workflows through the Grass Valley Media Universe (GVMU), which includes the AMPP SaaS Platform, an open ecosystem delivering significant advantages with flexibility across on-prem, hybrid or cloud native deployment models. With this recapitalization, Grass Valley will accelerate its investment across the combined GVMU integrated hardware and software solutions, enabled by AMPP, further extending its leadership across live, networking, content production, and playout workflows.

“We are pleased to be Grass Valley’s financing partner and support the company in its next phase of growth,” said Peter Ma, Managing Director, Morgan Stanley Private Credit. “This debt investment is an example of our ability to provide a flexible capital solution tailored to meet Grass Valley’s needs, positioning the business for significant future success.”

Commenting on the investment, Grass Valley’s Chairman and CEO, Louis Hernandez Jr., said: “This recapitalization serves to accelerate Grass Valley’s growth coming out of a successful 2023. We had our strongest year since 2020 for live production and networking infrastructure hardware. Earnings increased over 100%, revenues nearly doubled thanks to a significant increase in recurring revenue with AMPP, and we hired hundreds of employees globally. This investment will accelerate Grass Valley’s innovation across their entire portfolio during an industry-wide transition period, particularly in the AMPP ecosystem.”

About Grass Valley

Grass Valley is the leading media technology provider for the media and entertainment industry. Trusted by the world’s top media brands, Grass Valley is empowering content producers to deliver great live experiences through best-in-class hardware and software solutions that improve efficiency and reduce costs. Supporting customers across the globe, Grass Valley is at the forefront of groundbreaking media innovation and continues to create the future of live media production. Headquartered in Montreal, Grass Valley has been engaged in the media technology business for over 60 years. For more information about Grass Valley, go to grassvalley.com.

About Morgan Stanley Private Credit

Morgan Stanley Private Credit, part of Morgan Stanley Investment Management, is a private credit platform focused on direct lending and opportunistic private credit investment in North America and Western Europe. The Morgan Stanley Private Credit team invests across the capital structure, including senior secured term loans, unitranche loans, junior debt, structured equity and common equity co-investments. For further information, please visit the website: morganstanley.com/im/private-credit

Morgan Stanley: Alyson Barnes

(212) 762-0514

mediainquiries@morganstanley.com



Grass Valley: Bénédicte Fauveau

benedicte.fauveau@grassvalley.com

Source: Morgan Stanley Private Credit

FAQ

What is the amount of the recapitalization led by Morgan Stanley Private Credit for Grass Valley?

Morgan Stanley Private Credit led a $220 million recapitalization for Grass Valley.

What industry does Grass Valley operate in?

Grass Valley operates in the media technology industry, providing end-to-end solutions for live media and entertainment.

What is the name of the open ecosystem included in the Grass Valley Media Universe?

The open ecosystem included in the Grass Valley Media Universe is the AMPP SaaS Platform.

Who is the Managing Director of Morgan Stanley Private Credit?

Peter Ma is the Managing Director of Morgan Stanley Private Credit.

What were the key achievements of Grass Valley in 2023 as mentioned in the press release?

In 2023, Grass Valley had its strongest year since 2020 for live production and networking infrastructure hardware, with earnings increasing over 100% and revenues nearly doubling.

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