Acquisition of Sequential LLC
Strictly embargoed until 07.00, 27 April 2021
Focusrite plc
( " Focusrite " or " the Group ")
Acquisition of Sequential LLC
Focusrite plc (AIM: TUNE), the global music and audio products company, today announces the acquisition of Sequential LLC ( " Sequential " ), a California based, world-renowned, high-end synthesizer company. The existing management and team will stay with the business post acquisition.
The total consideration to be paid is $24 million (c £ 18 million) for the business, with initial consideration of approximately $20 million of cash paid on completion and the remaining $4 million to be paid subject to certain performance conditions. The initial consideration will be funded through a combination of existing cash resources and an £ 8m drawdown on an existing facility of £ 40 million with HSBC and NatWest. Following the acquisition of Sequential, the Group will have net cash of approximately £12 million.
Sequential is headquartered in San Francisco, California in the historically and culturally rich North Beach neighbourhood from where it will continue to operate and be led by legendary instrument designer and Grammy winner Dave Smith, who founded Sequential Circuits in 1974.
The Sequential portfolio of high end analogue synthesizers dramatically expands the footprint the Group has with its Novation branded instruments , offering more premium priced solutions for electronic artists. The Group also sees the possibility of future synergies between the Sequential and Novation's R&D teams to bring new innovative products to market that will further the Group's mission of "removing barriers to creativity".
In the year to 31 December 2020, Sequential ' s unaudited turnover was $18.3 million. EBITDA and EBIT, also unaudited, were $3.5 million. The Board expects the acquisition to be enhancing to earnings per share in the current financial year, excluding non-underlying transaction costs, and thereafter.
This is the third major acquisition made by Focusrite since its flotation in December 2014, the first being the acquisition of ADAM Audio GmbH for a total consideration on £ 16.2 million in July 2019, followed by Martin Audio Ltd in December 2019 for a total consideration of £39.2 million.
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 of growing the core customer base, expanding into new markets and increasing lifetime value for customers.
Tim Carroll, Chief Executive Officer, commented:
"It is an absolute pleasure to welcome Dave and the entire Sequential team to the Focusrite Group. Sequential adds to our rich heritage of innovation and passionate people who are dedicated to making world class solutions for musicians. For us, Sequential is a perfect fit, and a logical choice to add to our Group. While Sequential will continue to operate as a separate business unit with a very robust roadmap , we are all excited about the opportunities and possibilities that lie ahead with the collective expertise of the Sequential and Novation R&D teams."
Phil Dudderidge, Chairman, commented:
"We are excited and pleased to add Sequential's instruments and pedigree to Focusrite Group's portfolio of world-class audio and music production tools. Dave Smith's history as an innovator speaks for itself. From his creation of the world's first fully programmable polysynth, the Prophet 5, to his co-invention of MIDI, Dave has literally changed the world of music several times. We are looking forward to continuing his history of innovation and expanding the global market for Sequential's instruments."
Dave Smith, Founder of Sequential, commented:
" With Focusrite, we have found an ideal home and a perfect cultural and technological fit. Phil and his team have a long history of quality, vision, and focus on what musicians and audio professionals really want. We're excited to join such an industry powerhouse and contribute to our mutual success. I expect great things. "
-ends-
Enquiries:
Focusrite plc: +44 1494 462246
Tim Carroll (CEO)
Sally McKone (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
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 seven brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio and Optimal 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. Martin Audio designs and manufactures performance-ready systems across the spectrum of sound reinforcement applications. Optimal Audio is a commercial audio brand offering a one-stop solution of control, amplification, and loudspeakers for small to medium-sized commercial installations with a focus on multi-zone venues.
The Focusrite Group has offices in four continents and a global customer base with a distribution network covering approximately 160 territories.
Focusrite plc is traded on the AIM market, London Stock Exchange.
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