Let’s assume you own a lemonade stand. There are two ways to expand that enterprise. One is organic growth — setting up, staffing and building more stands in new locations; or through acquisitions, essentially buying existing stands (some may be your competition), adding them to your organization and running them your way.
However, the organic approach equates to a considerable amount of work — construction, permits, training, staffing and perhaps marketing — to create the new location, yet you still may have to deal with competition in those locales.
Alternatively, you can purchase companies that have a foothold/client base in their realm, and in some cases, this eliminates a potential competitor once they switch to your team. The downside of acquiring is the process can require significant capital, but there are any number of ways that can be handled. And on the plus side, some redundant departments (such as accounting) can be eliminated post-sale, resulting in potential savings.
Well-known merger/acquisitions include: AT&T/Time Warner; Disney-Pixar-Marvel; Exxon/Mobile; and on and on. So last week, when Clair Global announced it was acquiring ATK Audiotek, we weren’t entirely surprised, as Clair has a long history of such transactions, going back to the Showco/Clair Bros linkup of 2000 and, more recently, picking up Britannia Row in 2017 and Eighth Day Sound just over a year ago.
Meanwhile, rival Solotech has expanded, buying Waveform Entertainment, Morris Light & Sound, Miami Stagecraft, Pro Sound Inc., J Sound Services and SSE Audio Group — all in the past three years. It happens in pro audio manufacturing all the time — whether Altec/Lansing, Samsung/Harman, Focusrite/Martin Audio, DiGiCo/KLANG, RCF/DPA, Audiotonix/SSL — and we can be assured of more to come.
And this week, it’s Fender buying PreSonus. So who’s next?
