Nevada City’s Telestream Acquired by Genstar Capital

The Union has some details:

Telestream Inc., a global provider of live and on-demand digital video tools and workflow solutions located in Nevada City, announced Wednesday that Bay Area private equity investment firm Genstar Capital has entered into a definitive purchasing agreement.

“Genstar’s mid-market focus and deep expertise in the software industry will enable Telestream to further accelerate our growth,” Telestream CEO and co-founder Dan Castles said. “Over the past several years, Telestream has experienced its most significant growth. We look forward to our new partnership with Genstar as we increase our investment in existing products, accelerate our reach into new customer verticals, and fuel our next phase of development through additional (mergers and acquisitions.)”

While this move is good for Telestream, it may not be good for the community long term. If you recall the acquisition of Grass Valley by an Investment Group, the company has declined, and is now part of another company that is consolidating manufacturing outside of Nevada County. The Grass Valley buyout by an investment firm was not a positive for the local economy.

Telestream has struggle to grow locally, unable to acquired engineering staff they needed to grow. They made some acquisitions  and started an expansion operation in Emeryville, hoping to hires some younger engineers with new ideas and skills. Rumor is that the Emeryville experiment was not highly succesfull. A disaster said, one engineer. Locally Telestream was having problems hiring engineers experienced in writing C++ code.  (C++ programers are not going extinct, just hard to find those willing to move to rural Nevada County and leave the good life of San Francisco, San Diego, Portland or Seattle behind.)

While the Telestream HQ may remain in Nevada City, it is highly likely that expansion will be done elsewhere, where there is a ready pool of engineering and software developers. Since that pool does not exist  in Nevada County, Telestream will have to seek the needed talent else where, perhaps through acquisition.  Only time will tell.

About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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3 Responses to Nevada City’s Telestream Acquired by Genstar Capital

  1. gjrebane says:

    Had the same thoughts upon reading this morning’s Union. This buyout is a success for Telestream’s founders and shareholders – it was no doubt high on their list of ‘exit strategies’. And it is true that such buyouts, especially by buyers already in or owning similar businesses, will involve what can only be called aggressive consolidation of the acquired business with existing operations. In this deal Genstar Capital is most likely acquiring some intellectual properties, an established brand, and therefore market share. As an astute buyer, Genstar has already identified the technical people who are the de facto ‘owners’ of Telestream’s IP. Their jobs are secure (and most likely secured by contingent employment agreements accompanying the purchase).

    The question we in Nevada County have to ask is ‘what compelling reasons are there to maintain Telestream operations in a remotely located rural county?’ And this question becomes even more critical when viewed in light of our local policies on development, housing, schools, and population growth. As an astute engineer, given the history of such buyouts, why would I move my family to Nevada County?


    • Russ Steele says:

      This acquisition was touted as good thing for the local economy this morning at the ERC Board meeting. I am not sure they have a true grasp of the long term implications.


      • gjrebane says:

        They were probably thinking that new investment is coming into the county, instead of another going concern being extracted from the county. I thought the ERC was under business-savvy leadership.


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