Avid Technology Inc. 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.
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,” says 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 percent 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 comments, “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.”
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.
The boards of directors of both Avid and M-Audio have unanimously approved the definitive agreement. The acquisition has received Hart-Scott-Rodino antitrust clearance and is expected to close before the end of August after the satisfaction of certain closing conditions. The acquisition is expected to be recorded in Avid’s third quarter, subject to the completion of fair valuation analyses and the allocation of the purchase price.
A conference call to discuss the M-Audio acquisition will be held on Friday, August 13, at 8:00 a.m. EDT. The call will be open to the public. The conference call can be accessed from any U.S. or international location by dialing 719/457-2649 and referencing confirmation code 994706. The call and subsequent replay will also be available on Avid’s Web site. To listen via this alternative, go to the Investors page under the Company menu at www.avid.com for complete details 10-15 minutes prior to the start of the conference call. The company expects to announce its third quarter 2004 results on Tuesday, October 26, 2004.
For more information on Digidesign, a division of Avid Technology Inc., visit www.digidesign.com.