Avid sells M-Audio to inMusic
Pro Tools manufacturer Avid is selling M-Audio, the music technology hardware and software company that it acquired in 2004. The buyer is inMusic, the parent company of Akai Professional, Alesis, Numark, and others – and, notably, historically a competitor of M-Audio.
Commenting on the move, which represents part of a wider restructure that also sees the company’s consumer video editing line being sold to Corel Corporation, Avid says that it wants to “focus the company on its Media Enterprise and Post & Professional customers and to drive improved operating performance.”
“The changes we are announcing today make Avid a more focused and agile company,” said Gary Greenfield, CEO of Avid. “By streamlining and simplifying operations, we expect to deliver improved financial performance and partner more closely with our enterprise and professional customers. Our objective remains to provide these customers with the innovative solutions that allow them to create the most listened to, most watched and most loved media in the world. I’m excited about our future prospects.”
The divested product lines contributed approximately $91 million of Avid’s 2011 revenue of $677 million. As part of the transactions, certain employees of Avid will transfer to each acquiring company. Avid estimates that the proceeds from these transactions will be approximately $17 million, subject to closing inventory adjustment, with a portion held in escrow. Both transactions were expected to close on July 2, 2012.
Avid also plans to reduce the number of its employees as it streamlines operations, with approximately 20 percent of its permanent employee base impacted by the divestitures and headcount reduction plans. The company currently expects to incur a restructuring charge of approximately $19 to $23 million related to these actions and other associated measures.
The company’s cash balance on March 31, 2012 was $49.7 million. The proceeds from the sale of these product lines should offset most of the restructuring charges paid in 2012.
Avid will continue to produce its Pro Tools range and Mbox interfaces.