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Solid State Logic Sells APT

APT (Audio Processing Technology), the Belfast-based audio compression specialist has secured significant equity and debt funding, which has enabled the company to complete a management buyout from its former owner, Oxfordshire-based Solid State Logic.

APT (Audio Processing Technology), the Belfast-based audio compression specialist has secured significant equity and debt funding, which has enabled the company to complete a management buyout from its former owner, Oxfordshire-based Solid State Logic.

Equity for the buyout was provided by venture capital companies Crescent Capital and Trinity Venture Capital and APT’s senior management (managing director Noel McKenna and commercial director Jon McClintock). Bank of Ireland provided the debt funding. The deal will enable the company to boost its sales and marketing activities and to continue to fund research into new technologies that will benefit its customer base.

APT is known especially for its audio compression algorithm – apt-X™, which has achieved international use in radio broadcasting and other professional audio applications.

APT has two identifiable business units; manufacturing audio codecs and licensing its apt-X™ algorithm. At present, the radio broadcast market is where APT currently leverages its primary profitability, with key licensees such as Pulsecom and Harris in the USA. Hardware customers include the recently formed GCAP group (formerly GWR and Capital in the UK), BBC, BT, Teracom (Sweden), Fuji TV (Japan) and NPR (USA). Among the company’s many customers is George Lucas’s team at SkyWalker Sound, who are using apt-X™ to enable film directors to approve 5.1 audio mixes over the Internet. APT has also enjoyed tremendous success is the security industry where agencies in the USA use the company’s codecs for secure audio networking.
APT’s senior management, Noel McKenna and Jon McClintock, began management buyout negotiations with Solid State Logic in January 2005.

“This deal is something that Jon and I have been striving towards for some time,” says Noel McKenna. “We have both been with the company for 11 years and we are delighted to have the opportunity to participate in its ownership. Our aim is to continue to develop new products that will allow the radio broadcast industry to continue to deliver high-quality audio. We will also be tackling multichannel applications for embedded audio into video and increasing our licensing portfolio for the professional and consumer audio markets. These areas have huge potential for the future of the company.”

Jon McClintock adds that, “This is a very positive move for APT as it will allow us to significantly expand the company and capitalize on the sales potential of our existing product range. APT already has a strong global reputation for delivering smart solutions to the broadcast and audio post-production industries, thanks to our WorldNet series of codecs, featuring APT’s proprietary algorithm apt-X™, which have secured significant market share. However, we now feel confident that we can drive sales across the board, particularly for products such as the recently introduced WorldNet Oslo, which has the potential to achieve a much larger percentage of the market than has previously been realized through organic growth alone.”

APT’s strong track record and its credibility within the professional audio markets were instrumental in securing finance from Belfast-based Crescent Capital and Dublin-based Trinity Venture Capital. Following the buyout, both Gavin Bourke, of Trinity Venture Capital, and Hal Wilson, of Crescent Capital, have joined the APT board of directors.

Gavin Bourke says that, “We are delighted to be investing in this exciting business, which we believe has a very strong management team and real potential for future significant growth. The traction the company has generated to date from customers across a number of sectors, including radio broadcast, film post-production and consumer audio markets is very impressive. This injection of capital will enable the company to expand its investment in sales and marketing and continue to invest in new technologies that will considerably enhance the value of the business in the future.”

Hal Wilson adds that, “APT is a business that we have followed for some time. It is a company that has an established position in a number of international markets with growth opportunities that can be readily matched to a significant skills base that exists today in Northern Ireland. The opportunity to back the company’s management in this next stage of growth represents an enticing proposition.”

“Our new investment partners share our belief and confidence in the future of APT, which thanks to this equity injection couldn’t be brighter,” adds McKenna. “Over the next 12 months, we will be appointing 10 new members of staff to build on the strong team we already have in Belfast and this will be key to helping us achieve the goals we have set ourselves.”

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