Focusrite has announced the strategic acquisition of Pro Audio, the holding company for ADAM Audio and its subsidiaries (ADAM) for a cash consideration of €18.0m (£16.2m), representing 1.4x price/sales and 18x price/earnings multiples for 2018 and funded entirely from existing cash resources.
ADAM is a leading German developer and global distributor of professional studio monitor loudspeakers. In the year to 31 December 2018, the business delivered sales of €12.9m, adj. EBITDA of €1.7m and PBT of €1.0m. Net assets at 31 December 2018 were €4.1m, mainly comprising high quality stock.
Although management intends for ADAM to continue operating autonomously as a subsidiary, we see clear opportunities for cross-selling and to leverage Focusrite’s global distribution network.
After the acquisition Focusrite expects to have net cash of c £12m and expects the acquisition to be earnings accretive in its first full year of consolidation.
Author: Kate Heseltine