Monday, July 02, 2012

Avid sells off consumer businesses, downsizes by 20%

According to Pro Sound News, Avid announced today that, with a couple of exceptions, it's abandoning the consumer market and focusing on professional products. The company is reducing its permanent workforce by 20% and selling off its consumer audio and video businesses, including M-Audio and the former Pinnacle Systems. The consumer audio products, including M-Audio keyboards, controllers, interfaces, speakers and digital DJ equipment, are being sold to inMusic, the owner of Alesis, Akai Professional and Numark. Corel will purchase Avid's consumer video software, including Avid Studio, Pinnacle Studio, the Avid Studio App for iPad, as well as Avid's legacy consumer video capture hardware. Avid will continue to develop and sell its Mbox and Fast Track audio interfaces for Pro Tools. It's unclear if inMusic will bundle the M-Powered version of Pro Tools with its M-Audio interfaces in the future, or whether development of the M-Powered version will continue.

The product lines that Avid is selling off accounted for approximately $91 million (13.4%) of the company's $677 million revenues in 2011. Avid will take a restructuring charge of between $19 and $23 million, most of which will be offset by $17 million being paid by inMusic and Corel to acquire the product lines. (Avid paid $462 million to acquire Pinnacle Systems in 2005, plus $80 million plus 2 million shares of stock (at $44.33/share when the deal closed on August 20, 2004) to acquire M-Audio, for a total of $630.66 million.)
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