Building forces: How Audiotonix has built its portfolio of audio greats and what might be coming next

Audiotonix recently announced that the company had received new investment from private equity firm PAI Partners, its sixth round of funding since its first historical investment in 2007 when there was no group, simply the live console business, DiGiCo.

Since then and several rounds of funding later, parent company Audiotonix is 12 audio-focused businesses strong, with products that focus on industries from theatre and film to live sports broadcasting. It has grown continuously over the years by taking in investment and buying then strengthening brands focused on audio.

James Gordon, CEO at Audiotonix, says that after that first round of investment, the next came around four years later. “Generally with private equity, they like to have a change every three to four years. So then we moved to another company, Livingbridge, in 2011.

“That’s when we decided that as DiGiCo, we were getting to a size where we were likely to be acquired by a bigger corporate within our industry, but the management of DiGiCo at the time didn’t feel that was right for the company; generally, in our industry, it doesn’t work that well when companies get acquired and get bought into a bigger things. We were worried that was going to happen to DiGiCo and the team that we’d built for 10 years at that point.”

Keeping creative

On why that move would not have been the right thing for DiGiCo at the time, Gordon states: “Generally what happens is they come in and enforce rules or put structures upon things, and that means creative people feel frustrated by it, and then the passion goes. And when the passion goes, generally smart people move on because there’s more to life than just work. You should enjoy what you do as well.

“We were very worried that that was going to happen to DiGiCo,” he continues with the story. “In 2013, we started talking to a larger UK fund, called Electra Private Equity at the time, soon to become Epiris. They bought into the concept we could acquire businesses, keep them independent as brands with independent teams, but leverage as much as we could in the background to allow them to develop technology quicker.

“It’s quite expensive for small companies to develop the latest technology and to keep ahead of that,” he notes. “We thought we could leverage R&D, we could use our sales knowledge globally to help companies with their aspirations in different geographies or whatever. And all aspects of the business can benefit – purchasing, manufacturing, new design ideas, all of that – but in the background, so it didn’t interfere with the culture of the business that the staff liked, but also the culture of the business that customers liked too. Customers are very loyal.”

James Gordon, CEO at Audiotonix

Building forces

That was the start of Audiotonix, Gordon goes onto explain, when DiGiCo, Allen & Heath, and Calrec joined forces in 2014. Says Gordon: “It took us, I don’t know, three or four years to work out what we were doing, and we were very cautious. We didn’t want to do anything too quickly. We didn’t want to risk anything. So we took it slowly.

“Then we realised that actually we weren’t messing it up, we were doing all right and all three of the brands were doing better. We’d done the merge, and all [the brands] were doing better in their particular marketplaces.”

At that point, the team heard that Solid State Logic (SSL) was potentially coming to market. The background here was that Peter Gabriel, the original lead singer of infamous rock band, Genesis, along with broadcast entrepreneur David Engelke, became majority shareholders in SSL in 2005. Audiotonix then acquired SSL in 2017 as Gabriel searched for a company to protect the business. Gabriel became an investor in the Audiotonix group at that point.

Says Gordon: “Gabriel was at the point where he wanted to sell [SSL] to somebody that was going to look after it because he had his first hit records on an SSL, and he was emotionally connected to the brand and never wanted to see it disappear. So SSL was our next logical one. We went out and got another round of private equity, and that’s when we joined up with SSL, KLANG:technologies and Group One.”

Next up in private investment for Audiotonix was Ardian, which came along in 2020. The deal was signed just as the pandemic became a reality, notes Gordon: “Interesting time… We literally completed that deal on 18 March and sent everybody home on 22 March for lockdown. All of our brands, in some way, were affected, but Ardian were great. They allowed us to continue our investment into R&D, which we kept doing. We kept all the staff, which was really important for us; we’d spent years building it and we didn’t want it to get ripped apart. It’s nice to have investors that sat there and went, “yeah, this is the right move for the business, we should keep it going”.”

Strong position

Audiotonix stepped out of the pandemic in an excellent position thanks to that time in R&D. States Gordon: “Some of our competitors had taken their foot off [the gas] and had decided to take advantage of furloughs or short-time working and all the different variants that every country came up with.”

In 2021 Audiotonix further expanded its operations with the acquisition of TV and film location sound and RF wireless specialists, Sound Devices.

2022 saw the company finalising the addition of Slate Digital, a provider of audio processing and instrument plug-ins software and microphone modelling.

2023 saw multiple acquisitions across the group. US-based pro audio console and music production software manufacturer Harrison joined SSL, followed by the acquisition of sonible, a developer of assistive artificial intelligence (AI)-based processing solutions for professional audio. Finally in October, DiGiCo announced the acquisition of Fourier Audio, a UK-based live sound software developer and manufacturer, strengthening the group’s investment in live sound innovation.

Audiotonix consists of 12 brands:       

• Allen & Heath
• Calrec
• DiGiCo
• DiGiGrid
• Fourier Audio
• Group One
• Harrison
• KLANG:technologies
• Slate Digital
• Solid State Logic
• Sonible
• Sound Devices

Buy! Buy! Buy!

Now, on 23 April 2024 Audiotonix announced its new investment deal with PAI Partners. Previous partner, Ardian, has kept a minority stake in Audiotonix via reinvestment as part of this transaction along with previous investors Astorg.

On that investment strategy, Gordon says: “We want to buy brands or have brands that we can add something to, and they add something back to us as well, so we can contribute together, just because otherwise, if you sit around the table, and you can’t help each other, it’s not really a relationship, is it?

“One of the great things with the group is when the brands come in – and we’re about 800 staff now – none of the brands are bigger than 150. They’re still quite agile and entrepreneurial in their workflow and style, which I like because I can cope with that.”

“When we acquire a new brand, they all get to meet each other and talk about what are you doing? There’s lots of stuff that is very small, but it’s knowledge share stuff that means that all the brands can get more efficient and get more products out to market or help customers get better end results.”

As to what could be the ideal company or technology to add to an already well-stocked group of audio businesses, Gordon says: “There are things that five years ago we didn’t look at because we didn’t have the right [brands and knowledge internally] to do that with. But as we’ve grown and added things, and the brands have grown, some of those things now would make sense.

“I’ve made the mistake before of saying, “we’ll never do that”, and then four years later, I’m like, “oh, actually it’s quite a good idea now.” So I’ve decided I’m not going to ring-fence it off. Anything is up for discussion, but we will always follow the rule.”

Out of Audiotonix’ 800 staff members throughout its brands, around 20 are core cross-brand roles and a hefty 260 are pure R&D. Dropping the mic, Gordon concludes: “By far our biggest expense across the whole group is R&D, and that passion to keep evolving and creating, I don’t think we’ll ever lose because if we do, we might as well switch off the lights and go home.”