Focusrite acquires Martin Audio for £39.2 million

Focusrite acquires Martin Audio for £39.2 million 1LONDON: Focusrite plc has announced the acquisition of Martin Audio and associated companies, the designer and manufacturer of high-performance loudspeaker systems for the touring and installation markets.

The total consideration to be paid is £39.2 million for the business, which has approximately £4.0 million of cash.

This will be funded through a combination of existing cash resources and a new loan facility of £40 million with HSBC and Natwest.

The Board expects the acquisition to be enhancing to earnings per share in the current financial year, excluding non-underlying transaction costs, and thereafter.

Founded in 1971 and also headquartered in High Wycombe, Martin Audio, designs, manufactures and distributes premium professional sound systems across the globe. It employs some 74 people worldwide, with the vast majority based at its head office and co-located manufacturing facilities.  In the year to 31 December 2018 Martin Audio’s turnover was £21.7 million1, with EBITDA of £2.6 million and EBIT of £2.4 million.  Net assets for Martin Audio as at 31 December 2018 were £4.1 million.

In the 12 months to October 2019 (unaudited), Martin Audio’s turnover was £24.4 million, with an EBITDA of £3.4 million and EBIT of £2.9 million.  The deal marks an exit for LDC, the private equity arm of Lloyds Banking Group, who backed the existing management team, led by Dominic Harter, to buyout the firm from global audio specialist Loud Audio in July 2018.

This is the second substantial acquisition made by Focusrite this calendar year, following the purchase of ADAM Audio GmbH and its associated companies for a total consideration of £16.2 million in July 2019.  Following the acquisition of Martin Audio, the Focusrite Group will have a net debt of approximately £25 million.

Tim Carroll, Chief Executive Officer, commented: “The acquisition of Martin Audio is a clear demonstration of our strategic aim to expand into complementary new markets. Martin Audio is an established brand with solid financials that can instantly add value to the enlarged Group. Just as importantly, the business is culturally aligned with our existing operations. They will have an important role to play as we continue to focus on our goal of enriching lives through music, by removing barriers to creativity; from that first spark of musical inspiration, to delivering an emotionally charged performance on stage. The Martin Audio team share our hunger to innovate and our passion as music and sound enthusiasts. Their close geographical proximity to Focusrite will help significantly in the development of future cross selling and marketing strategies.”

Managing Director of Martin Audio, Dominic Harter said: “We are excited by the Transaction and what Martin Audio can achieve together with Focusrite. Focusrite is a strong brand in the industry and given the geographic proximity of both our businesses we know the team at Focusrite very well. There is a great deal we can do together and we look forward to working closely to develop the opportunities across both of our businesses.”

Edited by Nayyar Iqbal

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