In what seems very much to be a case of right time, right company, TASER International (NASDAQ:AAXN) has made a modest but potentially significant acquisition. The company announced earlier this month that it signed a definitive agreement to buy privately held MediaSolv, a provider of video solutions for law enforcement organizations.

The price is $8 million, which could rise to as high as $13 million due to potential auxiliary costs such as earn-outs and retention payments for MediaSolv's owners and employees. That's not too burdensome for a company the size of TASER, and it appears to be money well spent.

Supporting evidence
Likely the biggest enticement for TASER was MediaSolv's Evidence Center. As the name implies, this is a one-stop digitized repository of video footage collected from police body cameras, interview rooms, dashboard video units, closed-circuit TV feeds, and other evidence sources.

MediaSolv also produces and sells the hardware that supplies this footage. This end of the business includes fixed surveillance and body cameras. MediaSolv's current clients include the Chicago, Philadelphia, and Toronto police forces.

The firm's offerings nicely compliment TASER's line of body cameras, Axon, and the subscription-based service that absorbs content from them, TASER is the market leader in body camera technology, which has gotten a lot of ink following the recent notorious cases of civilian deaths at the hands of police in Ferguson, Missouri, and Baltimore.

There is not only interest from both sides of the blue line -- police and public -- in the benefits of body cameras, there's also serious financial muscle behind the technology. In the wake of those awful incidents, it was announced that the Department of Justice would spend $75 million over the next three years to equip police departments throughout the country with them.

Not all of that business will flow TASER's way, but the company's sure to collect at least a healthy chunk of it. Axons enjoy a good reputation as dependable gear.  And they're already hot items, with sales growing by 73% on a year-over-year basis in the company's most recently reported quarter (to over $6 million), helping to drive total revenue 24% higher to $45 million. 

A valuable package
So, we should expect TASER International to put even more distance between itself and the competition once it manages to more tightly lace MediaSolv's solutions into its products, especially the Axon family.

In fact, the week after it revealed the acquisition, TASER announced that it received an order from the Louisville, Kentucky metro police department for nearly 1,000 Axons, in addition to a subscription to an upper tier of the service ... plus what it described as "the MediaSolv solution for CCTV video and photo management." So, business is already rolling in for TASER/MediaSolv packages.

Meanwhile, the financial impact of the acquisition isn't too heavy -- at the end of its most recently reported quarter, TASER had nearly $47 million in cash and equivalents on its balance sheet. Even if it ends up paying the maximum amount for MediaSolv -- again, an asset that's already producing returns -- this would amount to just a bit over one-third of cash.

The day the acquisition was made public, TASER stock closed 3% higher over the previous day. The market's reaction was perhaps a bit restrained; MediaSolv was a smart, well-timed and relatively inexpensive buy for the company that will almost certainly strengthen its business.