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Avid to Acquire M-Audio - Deal will unite two leaders in the audio industry (13/8/2004)
Avid Technology, Inc. (NASDAQ: AVID) today announced that it has entered into a definitive agreement to acquire Midiman, Inc., doing business as M-Audio - a leading provider of digital audio and MIDI solutions for electronic musicians and audio professionals. At closing, Avid will pay approximately $80 million in cash, issue approximately 2 million shares of Avid common stock, and assume all outstanding M-Audio stock options. The deal also includes earn-out provisions, which would be payable to M-Audio's equity holders based on the successful achievement of certain financial milestones. Under the terms of the agreement, M-Audio will become a business unit of Avid's Digidesign audio division and market its line of computer audio peripherals, PCI sound cards, keyboard controllers and control surfaces, microphones, speakers, and distributed software and proprietary sound libraries alongside Digidesign's award-winning digital audio workstations for the professional and home/hobbyist markets.
"Over the past several years, Digidesign has established itself as the clear leader in digital audio solutions for the professional studio and home recording markets," said David Krall, Avid's president and chief executive officer. "With this acquisition, we're bolstering our investment in the home studio market segment, the fastest growing portion of our audio business, where we achieved roughly 40% year-over-year growth in Q2 of 2004. We believe the addition of M-Audio to the Avid family will put us in a position to provide a complete set of creative tools to the market, from entry-level music hobbyists with home studios to facility owners, recording artists, audio engineers, and film sound professionals."
Digidesign general manager and Avid vice president Dave Lebolt commented, "The entry-level audio market offers attractive growth opportunities, and both Digidesign and M-Audio have demonstrated solid successes in this area. As a combined entity, Digidesign and M-Audio can tap into subsegments of this market that we would not otherwise reach as strongly on our own. At the same time, Digidesign will continue to focus in the professional audio space, including the expansion we've targeted in the mixing and live sound markets, while M-Audio will further extend its reach to an even wider consumer base. As a result, Avid will have a range of new capabilities to address the audio business, and customers will have a broader set of audio options to meet their increasingly diverse needs."
Founded in 1988 and ranked by The Music Trades as one of the fastest-growing companies in the music industry for the last four years, Irwindale, CA-based M-Audio has approximately 200 employees in the U.S. and Europe who develop products for the professional and consumer audio markets. In recent years, the privately held company has capitalised on the trend toward computer-based audio production by marketing and selling a wide range of the basic tools required for high-quality home recording. These products include USB and FireWire audio interfaces, USB MIDI keyboards and controllers, PCI sound cards, studio reference monitors, microphones, microphone preamps, and sound production libraries. The company also distributes third-party music production software and audio plug-ins.
"Both Digidesign and M-Audio, in our respective markets, have pioneered computer-based audio solutions that deliver professional quality at affordable prices," said M-Audio founder and CEO Tim Ryan, who will continue to oversee M-Audio's operations as the general manager of Digidesign's M-Audio business unit. "As we move forward, we plan to blend Digidesign's expertise in the professional arena with our proven track record for engineering advanced technology into low-cost, high-quality products. Customers can look forward to continued innovation from M-Audio as we pursue the opportunities that will result from this combination."
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