REG - Focusrite PLC - Acquisition of Linea Research Holdings Ltd

FocusriteAnnouncement

10/03/2022 15:15

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RNS Number : 3999E  Focusrite PLC  10 March 2022

For immediate release

Focusrite plc

("Focusrite" or "the Group")

Acquisition of Linea Research Holdings Ltd

Focusrite plc (AIM: TUNE), the global music and audio products company
supplying hardware and software used by professional and amateur musicians and
the entertainment industry, is pleased to announce the acquisition of Linea
Research Holdings Ltd ("Linea"), a UK based designer and manufacturer of
professional audio equipment.

Acquisition

The total consideration to be paid is £12.6 million for Linea, which has
approximately £1 million of cash. The initial consideration is approximately
£12.1 million of cash paid on completion and the remaining £0.5m to be paid
in cash subject to certain performance conditions relating to the period
ending May 2023.  The initial consideration will be funded through a
combination of existing cash resources and a drawdown of existing facilities
with HSBC and NatWest. Following the acquisition of Linea, the enlarged Group
will have net cash of approximately £7 million.

Linea, headquartered in Letchworth Garden City, UK was formed in 2003 by a
team of experienced professional audio specialists, and they design, develop,
manufacture and market innovative professional audio equipment globally.
 Their products include a range of ground-breaking amplifiers, including the
world-renowned M Series, together with Digital Signal Processors, audio
networking and software products. Two of the original founders, Davey Smalley,
Commercial Director, and Ben Ver, Engineering Director, will continue to lead
the business post-acquisition.

In the year ended 28 February 2022, Linea's unaudited revenue was £5.2
million. EBITDA and EBIT, also unaudited, were £1.2 million. The Board
expects the acquisition to be earnings enhancing in the current financial
year, excluding non-underlying transaction costs, and thereafter.

Focusrite's subsidiary Martin Audio is a significant customer of Linea - Linea
technology is behind the successful iKON amplifier series that powers
Wavefront Precision line arrays seen on live tours and at prestigious
festivals such as British Summer Time in Hyde Park.

The acquisition strengthens the critical source of supply of amplifier modules
for Martin Audio and will enable greater integration of loudspeaker and
amplifier technology in Martin Audio products. However it is also the
intention to continue to develop the sales of Linea products through
third-party distribution and to OEM loudspeaker customers.

By extending the Group's business into new products and markets, which
complement its existing offerings, the acquisition is strategically aligned
with the Group'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, said:

"It is an absolute pleasure to welcome Davey, Ben and the entire Linea team to
the Focusrite Group.  We know the team and the business well given that
Martin Audio is a major Linea customer. This will lead to many synergies and
is expected to improve gross margin for both Martin Audio and the wider Group.
Linea's products are globally recognised as best in class and we are all
excited about the opportunities and possibilities that lie ahead with the
collective expertise of the Linea and Focusrite Group R&D and sales
teams."

In a joint statement Davey Smalley and Ben Ver, Directors at Linea commented:

"We are delighted to be able to continue the Linea success story from within
the Focusrite Group. Having seen the support and growth of the brands within
the Group, we believe this provides us with a secure foundation to further our
R&D efforts and product portfolio, strengthening the Linea brand while
continuing partnerships with our long-standing OEM partners. This can only be
a good thing for our customers, end users and very much our staff."

- Ends -

Enquiries:

Focusrite
plc
+44 (0) 149 446 2246

Tim Carroll, Chief Executive Officer

Sally McKone, Chief Financial Officer

Investec Bank plc (Nominated Adviser and Joint Broker)           +44
(0) 20 7597 5970

David Flin

William Brinkley

Charlotte Young

Peel Hunt LLP (Joint
Broker)
+44 (0) 20 7418 8900

Edward Knight

Michael Burke

James Smith

Belvedere
Communications
+44 (0) 20 3687 2756

John West

Llew Angus

Notes to Editors

Focusrite plc is a global audio products group that develops and markets
proprietary hardware and software products. Used by audio professionals and
musicians, its solutions facilitate the high-quality production of recorded
and live sound. The Focusrite Group trades under nine established brands:
Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio, Optimal
Audio, Sequential and Linea.

With a high-quality reputation and a rich heritage spanning decades, its
brands are category lead-ers 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. Sequential designs and manufactures high end analogue
synthesizers.  Linea designs, develops, manufactures and sells market
innovative professional audio equipment globally.

The Focusrite Group has offices in four continents and a global customer base
with a distribution network covering approximately 240 territories.

Focusrite plc is traded on the AIM market, London Stock Exchange.

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