Diss audio-visual distributor Midwich to buy Spanish firm for potential €11m
PUBLISHED: 11:11 29 March 2017 | UPDATED: 16:12 29 March 2017
Archant Norfolk Photographic © 2016
Audio-visual distributor Midwich has delivered on the promise of its chief executive to pursue growth through acquisition after snapping up a European supplier.
The purchase of a majority stake in Spanish-based Earpro S.A in a deal valuing it at €11m will bolster Midwich’s continental presence and mean it now sells in more than 60% of the European market.
EDP/EADT Top100 firm Midwich, based in Diss, already has operations in France and Germany as well as Ireland and Australasia.
Managing director Stephen Fenby said: “The acquisition of Earpro marks Midwich’s entry into the Spanish and Portuguese markets, enabling the group to trade with a broad customer base across a variety of customer segments.
“The addition of this territory to the group’s portfolio increases Midwich’s geographical coverage, with the group operating in territories which account for approximately 60% of the European audio visual market.
“Earpro’s expertise and reputation in the professional audio market represent a strong complementary fit to the group’s activities.”
Earpro is a specialist audio and visual distributor focused on three technology categories – audio, lighting and video – distributes audio vendors including Shure and brands under the Harman umbrella.
AIM-listed Midwich identified at its initial public offering last year that it was looking to grow operations through both organic development and selective acquisitions.
Earpro has headquarters in Barcelona and a team of 45 people. It generated unaudited revenues of around €21m in 2016, representing growth of around 7% on 2015.
Midwich has bought 88% of Earpro up front with options to buy the remaining 12%, currently held by the company’s managing director, over the next three years. Consideration for the initial 88% of the company is split €5.8m on completion and €3.9m after 12 months, with the business expected to have net cash balances at completion of at least €3.2m.
Pre-tax profits hit £17.9m at Midwich last year as turnover grew by 17.8% to £370.1m.
The acquisition is the third in a year for the company, which bought Manchester-based firm Holdan and New Zealand company Wired following its flotation last year.