In July, private equity firm LDC backed a management buyout (MBO) of Martin Audio from LOUD, which had acquired it in 2007. LDC, an arm of the Lloyds Banking Group, is investing a reported £12 million (approximately $16 million in USD) for what’s termed a “significant stake” in the company alongside its current management team.
Founded by audio engineer David Martin in 1971, Martin Audio is a pioneer in the use of all-horn-loaded bass designs in touring loudspeaker systems for groups such as Pink Floyd and Supertramp. More recent introductions include the MLA (Multicellular Loudspeaker Array) system and Wavefront Precision line array, as well as an expanding roster of install systems.
The company’s UK headquarters in High Wycombe houses research & development facilities, manufacturing, warehousing, management, and customer support offices. More than 60 are on staff, led by managing director Dom Harter, whom we talked with in the wake of the buyout announcement.
ProSoundWeb: What does this deal mean for Martin Audio in the future, both shorter and longer term? And what does it mean to Martin Audio customers and perhaps professional audio in general?
Dom Harter: This is a great opportunity for Martin Audio to strengthen its position within pro audio. Immediately, it means that all decisions are now made with a view of growing this business rather than any constraints or influence of being part of a wider group. Longer term it will mean greater investment into the brand, product development and infrastructure to better serve our distribution partners and important our end users.
PSW: The deal was termed a “management buyout” – does this mean Martin Audio management will have more control in key company initiatives and directions, and/or, how will the relationship work between LDC and Martin Audio?
DH: Absolutely, the management team will be driving the key strategy and day to day decisions of the business. Of course this is with approval and indeed with input from LDC, but this is very much about a common goal: how best to grow the business.
PSW: The official announcement of the deal noted that Martin Audio’s new partner, LDC, is “growth-focused” – can you be more specific about what that means?
DH: LDC, in this instance, is working on the basis of enabling the management buyout with the specific remit to help grow the business so it’s a more valuable commodity in the future. It’s not one of stripping assets to give a veneer of a more profitable business. There is, therefore, the common goal of the management team and LDC to grow this business for the benefit of its customers, its workforce and its investors.
PSW: Specifically, how will this partnership benefit Martin Audio in terms of technology development?
DH: Well, we already have a very robust and exciting roadmap ahead for the next five years, and it plays a large part in driving the growth of the company. This partnership will help ensure that NPD [new product development] is properly invested in and managed in order to deliver this strong lineup of best-in-class products to the marketplace to benefit our resellers and end customers.
PSW: A follow up to the previous question – what’s the area of pro audio holding the potential for the most growth for Martin Audio, and why?
DH: Our road map is pretty extensive covering new applications to Martin Audio as well as refreshes to parts of the portfolio. Line arrays still look to make up a significant part of the growth, but our commercial install product line up will also be significant.
We’re also interested to see how far our immersive sound proposition – Sound Adventures – can also drive incremental loudspeaker system sales. We can’t be more specific at this stage, but we will definitely be a company to keep a good eye on.
PSW: Will there be other significant changes to Martin Audio’s current method of doing business, i.e., re-establishing a sales rep network in the U.S.?
DH: For the time being, it’s very much business as usual. The overall plan for Martin Audio has not fundamentally changed – make best-in-class products for the right price position. Having the appropriate amount of working capital will really help us market these products properly and provide the training and education to help ensure they are deployed in the best possible way.
We do want to invest in our infrastructure and support, but right now in the U.S. we’ve seen better returns with having a direct sales force than we ever had with a rep network, so it would be a case of further investment of a direct team and the services and systems to support that [rather] than taking a backward step.