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Focusrite PLC (TUNE)


Thursday 19 December, 2019

Focusrite PLC

Acquisition of Martin Audio Ltd

RNS Number : 4538X
Focusrite PLC
19 December 2019

Strictly embargoed until 07.00: 19 December 2019


Focusrite plc

("Focusrite" or "the Group")

Acquisition of Martin Audio Ltd

("Martin Audio")


Focusrite plc, the global music and audio products company supplying hardware and software used by professional and amateur musicians, today announces 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 completion of the loan facility, and hence the completion of the acquisition is dependent upon shareholder approval in a general meeting on 30 December 2019.  This is a Substantial Transaction under the AIM Rules.  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 ("ADAM") 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.


Martin Audio has a product portfolio across three core markets: Concert Touring/Production, Portable Sound Systems, and Installations. The market is growing and estimated to be worth in excess of $1.85 billion globally.  The business has a well-established global distribution network with relationships in place with global distributors, production companies and system integrators. It also has a well spread geographical sales mix with approximately 33% of Martin Audio's sales in the USA and Americas; 41% in EMEA; and 26% in APAC.


Martin Audio is recognised as a market leader and places great emphasis on product design and innovation to sustain and drive growth with a strong product roadmap in place. Following the transaction, it is expected that Martin Audio will continue to operate from its existing headquarters and factory in High Wycombe, under the leadership of its current management team and Managing Director, Dominic Harter.


By extending the Group's business into new products and markets, which complement its existing offerings, the acquisition is strategically aligned with the Company's previously communicated aims to grow the core customer base, expand into new markets and increase lifetime value for customers.


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." 


Chairman Phil Dudderidge added:


"Martin Audio is a close neighbour to us in High Wycombe, we have known and admired the Martin Audio group for many years and their current management recognised that Focusrite was a strong strategic fit to help them achieve the next phase of their growth plan.  My conviction as to the outstanding performance of the Martin MLA system was cemented at BST Hyde Park concerts in recent years, notably Tom Petty in 2017 and Eric Clapton in 2018."


1 For 2018, the Martin Audio performance consists of Martin Audio Limited (audited), which had turnover of £20.1 million plus Martin Audio North America (unaudited), which is supplied by Martin Audio Limited and had incremental turnover of £1.6 million.  Both Martin Audio Limited and Martin Audio North America are included in this transaction.






Focusrite plc:                                                                                                        +44 1494 836301

Tim Carroll (CEO) 

Jeremy Wilson (CFO)          


Panmure Gordon (Nominated Adviser and Broker)                                     +44 20 7886 2500


Freddy Crossley / Alina Vaskina

Erik Anderson


Belvedere Communications                                                                              +44 20 3687 2756


John West            

Llew Angus           


Transaction advisers to Focusrite plc


Lincoln International as buyside financial adviser, PricewaterhouseCoopers as financial and tax due diligence provider, Stephenson Harwood as legal adviser and Gill, Jennings and Every as intellectual property adviser.


The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.


Notes to Editors


Focusrite plc is a global music and audio products group that develops and markets proprietary hardware and software products. Used by recording professionals and musicians alike, its solutions facilitate the high-quality production of recorded and live sound. The Focusrite Group trades under six established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio and now Martin Audio.


With a high-quality reputation and a rich heritage spanning decades, its brands are category leaders in the music-making and audio recording industries. Focusrite and Focusrite Pro offer audio interfaces and other products for recording musicians, producers and professional audio facilities. Novation and Ampify products are used in the creation of electronic music, from synthesisers and grooveboxes to industry-shaping controllers and inspirational music-making apps.  ADAM Audio studio monitors have earned a worldwide reputation based on technological innovation in the field of studio loudspeaker technology.


Founded in 1971, Martin Audio designs and manufactures performance ready systems across the spectrum of sound reinforcement applications, with a highly developed portfolio of products to meet the exacting demands of a host of different markets. Renowned for integrity in design, technical excellence and the longevity of its products, Martin Audio systems are designed with in-built sound qualities artists can rely on to faithfully reproduce their performance to every corner of the auditorium.


The Focusrite Group has a global customer base with a distribution network covering approximately 160 territories. Both Focusrite and Martin Audio Ltd are headquartered in close proximity to each other, in High Wycombe, UK, with marketing offices in Los Angeles and Hong Kong.  ADAM Audio has offices in Berlin, Nashville and Dongguan. Martin Audio has a US subsidiary, based in Los Angeles. Focusrite plc is traded on the AIM market, London Stock Exchange.


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