Evertz Technologies has acquired a 3.12% stake in live production replay specialist EVS.

The announcement was made by EVS as part of a transparency notification required by securities regulators.

EVS says that it was notified on October 22, 2018 that Evertz acquired 424,936 EVS shares (presumably through open-market purchases), crossing the 3% equity stake that requires a transparency notification.

The open-market move by Evertz is unusual for a company that is typically focused on developing its own product portfolio, with the occasional bolt-on acquisition. Evertz generates a lot of cash, and pays a healthy dividend to its shareholders, including special dividends as high as C$100 million, which it did in 2013.  During its 2016 fiscal year, Evertz paid a special cash dividend of C$83.1 million, bringing the total dividend payout for the year to C$137.5.

Evertz competes with EVS in the live production replay market with its Dreamcatcher product.  However, EVS remains the dominant player in the live sports replay market, thanks to its long-standing customer relationships, as well as a loyal following among live production freelancers.

Despite its strong market position, 2018 has been a difficult trading year for EVS – highly unusual for an even-year filled with big events including the FIFA World Cup. The company experienced it’s first even-year decline in almost two decades when it issued its earnings for Q2 and 1H 2018.

Consequently, EVS has seen a sharp drop in it’s share price, which is down 45.2% since the beginning of 2018, and down 51.4% over the past year.

In 2018, EVS has also gone through a management shake-up.  In July of this year, the company and then Managing Director Muriel De Lathouwer mutually agreed to end De Lathouwer’s term of the office and duties, of Managing Director and CEO, effective July 10, 2018