Arecont Vision charts a new path under Costar's ownership

July 24, 2018
Surveillance manufacturer recapitalized and reinvigorated following it emergence from Chapter 11

In May, Arecont Vision announced it was filing for Chapter 11 bankruptcy protection as part of an effort to restructure its debt and clear its balance sheet in order to compete in what has become a new era for the security industry. Rather than piecing together best-of-breed solutions from different vendors, end-users today are increasingly looking for a one-stop shop from their integrator and manufacturer partners, which means the days of making a single component of the video ecosystem – as Arecont Vision had done in the past with megapixel cameras – are slowly coming to an end.

Recognizing this shift, Arecont at ISC West in April rolled out its more comprehensive Contera solutions, which include megapixel cameras (Arecont Vision Mega and Contera IP), video management system software (ConteraVMS), video recorders and NVRs (ConteraCMR), and cloud-based web management services (ConteraWS).

Last week, a bankruptcy court approved the sale of Arecont Vision to Costar, a U.S. corporation that designs, develops, manufactures and distributes a range of video surveillance and machine vision products. Following the close of the sale, Arecont Vision began operating as Arecont Vision Costar LLC, and joined the existing Costar family of brands: CohuHD Costar, Costar Video Systems, Innotech and IVS Imaging.  

According to Raul Calderon, President of Arecont Vision Costar, going through the Chapter 11 process was extremely helpful in enabling the company to shed its debut burden and that the company will now be able to fully devote itself to recapitalizing the business to address the changing market and its product portfolio.

“Elimination of this large financial burden now enables a significant portion of our profits to be reinvested into the business, instead of servicing the previous debt,” Calderon says. “This will ensure we are able to focus on delivering superior products to the market.”

From the perspective of Costar, James Pritchett, the company’s CEO and President, says Arecont’s products are a great addition to its current offerings, and Arecont fits with Costar’s strategy of acquiring firms that design and manufacture their own surveillance products.

“Together with our recent acquisitions, the addition of Arecont transforms our business from an OEM value-added business to one that 75 percent of our revenues are from products that are designed and manufactured,” Pritchett explains. “Another attractive aspect of the acquisition was that even though the Costar companies currently sell into the retail and financial markets, there was very little overlap of customers, so the acquisition significantly expands our overall customer base.”

Being recapitalized as a result of the acquisition, Calderon says Arecont now has a renewed commitment to reinvesting in key research and development, as well as sales and support activities. In addition, customers can expect to see benefits stemming from the potential synergies between Arecont Vision Costar, CohuHD Costar and other affiliated companies.   

“The synergies between Arecont and Costar are substantial, (including) executive management, accounting, operational efficiencies with our NetSuite ERP system, worldwide sales force, marketing, engineering and knowledge of contract factories in Asia,” Pritchett says. “Some of the synergies will be immediate; others will take some time. An early benefit will be in getting our CohuHD engineering staff together with the Arecont engineering staff to leverage the capabilities from both groups to advance our product development.”

Although there were legal requirements for Arecont to change its name at the operating company level coming out of Chapter 11, Calderon says there was no better way to demonstrate they are a new company than by adding “Costar” to the end of it. “It demonstrates the new, stronger Arecont Vision with the union of Costar,” he says.

Calderon adds that the products themselves will retain the Arecont Vision name for the foreseeable future. “The brand is an important part of the assets purchased by Costar, and there is no need to move away from the brand,” Calderon adds.

According to Calderon, the Contera product suite will remain a big part of the company’s plans moving forward. “In today’s marketplace it is essential to remain competitive, and the union with Contera is a big step toward accomplishing that goal,” he says. “It is also imperative to deliver differentiated solutions to the market, and our R&D roadmap combined with our proven engineering and design capabilities ensure that Arecont Vision Costar will continue to do just that.”

Calderon also stresses that there will be no changes in how they go to market, and that dealers, integrators, distributors and other partners will see no changes in how the company operates on a day-to-day basis. “However, as we release new products and solutions, and invest and improve both our customer service and after-sales support practices, all of our customers should experience the benefits of dealing with the new Arecont Vision Costar,” he adds.

For Costar, Pritchett says Arecont will provide them with two important capabilities that they didn’t previously have – a worldwide sales force that can expand their limited coverage and yield multiple cross-selling opportunities, as well as multi-sensor technology to add to their product offerings.

Costar also plans to keep Arecont’s existing facilities in place along with their employee base. “Our intent is to remain in the existing facility,” Pritchett says. “The onboarding process currently is 95 percent completed, and we expect that 100 percent of the employees will become employees of Arecont Vision Costar.”

About the Author:

Joel Griffin is the Editor-in-Chief of and a veteran security journalist. You can reach him at [email protected].