How to make some noise

"We believe in innovation, and so does Ardian" James Gordon explains the advantages gained by Audiotonix after five years of partnership with Ardian.

What were your business goals and growth strategy during the partnership with Ardian?

We have always been a very R&D-led company – we developed one of the first digital live mixing consoles more than 20 years ago. A lot more money is being spent on sound quality in all sorts of production nowadays – live events, recorded music, film and TV sets and so on. That trend is spreading round the world, which is giving us a bigger market to go after.
We had already bought great brands like Allen & Heath, Calrec and Solid State Logic (SSL) with our previous private equity investors, so we wanted to go further, to carry on innovating and stay ahead of our competitors. And we planned to do more acquisitions to take Audiotonix into new areas.

You completed the buyout on the eve of the pandemic. How did you adapt your business strategy and investment plans?

More than a third of the people at Audiotonix work in R&D. That’s our big advantage. So, we wanted to continue investing in it – we thought that was a risk worth taking because if our markets did bounce back as we expected, we would be in a much stronger position than competitors that had paused investment to wait and see. Ardian was incredibly supportive, considering the pressure it must have been under at that point.

What were the major business achievements and value creation milestones during Ardian’s investment in Audiotonix? 

Because we kept developing products and stayed close to our distributors and customers, we made big market share gains when the industry started up again. We also did four acquisitions during that period, three of them in software including Slate Digital, which brought us a big library of software plugins – tools for editing sound. SSL was already writing plugins, but Slate Digital gave us a lot more as well as a subscription charging model. During the pandemic, when live events stopped, that was valuable.

Why Ardian’s growth strategy was a successful investment decision for the company ?

Ardian backed Audiotonix’s drive to strengthen its global leadership among sound engineers by investing in innovation and using M&A to accelerate its growth in software. Ardian’s investment thesis for Audiotonix was based on the conviction that the company, was part of a global megatrend: the “experience economy”. Acquiring the world’s leading maker of professional mixing consoles represented a great opportunity to capitalize on the growth of premium live events – concerts, theatre and sport. 

Having identified Audiotonix in early 2019, the Ardian team soon realized that its products were everywhere, from music festivals to theaters, recording studios to retail stores and even churches and cruise ships. 

Ardian approached Audiotonix and after several months of getting to know the CEO, James Gordon, and his team, it was time to make an offer to the company’s owner. In late 2019, the deal was signed. Shortly after the deal completed on March 20, 2020, the UK went into its first Covid lockdown alongside many other countries. Faced with the enforced closure of Audiotonix’s main markets, Ardian and the management team had to find a way to keep the company on a growth path while rivals were off-balance.

They agreed to continue investing in R&D – the key source of Audiotonix’s competitive edge. Keeping the company’s large R&D team at work while major competitors were cutting back on investment enhanced its global reputation for quality and innovation. Audiotonix produced a steady stream of new and improved products that came good as its markets reopened. Audiotonix had moved further ahead of its competitors and – thanks also to the decision to stockpile components – it made big market share gains, particularly in the US. The second major opportunity the Ardian and the management identified was to expand rapidly through M&A while Audiotonix’s markets were disrupted. Together, they completed five strategic acquisitions between 2020 and mid-2024. 

Importantly, these deals were weighted towards software, which gave the company a new, recurring revenue stream that made it more attractive to potential acquirers. Personnaz likens Audiotonix to another company that combines world-class hardware and software design under one roof: Apple. Bringing these two disciplines together is the secret to making the highest quality equipment that will allow the world’s leading stars and events to stand out.

Today, the company’s expanded stable of brands, including Digico, Allen & Heath, Calrec, Solid State Logic and Sound Devices, is stronger than ever – and it has a new majority shareholder. However, Ardian has retained a large investment in Audiotonix, confident of its ability to continue setting the standards for its industry. The growth of the experience economy clearly has much further to run.

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