Avid is divesting its consumer business as part of a strategic move to focus its efforts on its media enterprise, and post and professional customers. According to details revealed by Gary Greenfield, CEO of Avid in a conference call on July 2, the company is selling its consumer focus product lines in a series of […]
Avid is divesting its consumer business as part of a strategic move to focus its efforts on its media enterprise, and post and professional customers. According to details revealed by Gary Greenfield, CEO of Avid in a conference call on July 2, the company is selling its consumer focus product lines in a series of separate transactions. The move will also see an estimated 20% reduction in its workforce.
Avids consumer audio products are being sold to inMusic, the parent company of Akai Professional, Alesis and Numark, among others. In Music is headquartered in Cumberland, Rhode Island. The products involved in this transaction include M-Audio brand keyboards, controllers, interfaces, speakers and digital DJ equipment and other product lines.
Avid will continue to develop and sell its Pro Tools line of software and hardware, as well as associated I/O devices including Mbox and Fast Track.
Separately, the companys consumer video editing line is being sold to Corel Corporation, a consumer software company headquartered in Ottawa, Canada. The products involved in this transaction include Avid Studio, Pinnacle Studio editing software, and the Avid Studio App for the Apple iPad, as well as other legacy video capture products.
The divested product lines contributed approximately US $91 million of Avids 2011 revenue. As part of the transactions, certain employees of Avid will transfer to each acquiring company. Proceeds from these transactions will be approximately $17 million, subject to a closing inventory adjustment. A portion of these proceeds will be held in escrow.
Avid also plans to reduce the number of its employees as it streamlines operations, with approximately 20% of its permanent employee base impacted by the divestitures and headcount reduction plans. The company currently expects to incur a restructuring charge of approximately $19 to $23 million related to these actions and other associated measures.
The companys cash balance on March 31, 2012 was $49.7 million. The proceeds from the sale of these product lines should offset most of the restructuring charges paid in 2012.
