Audiovisual specialist Midwich is to acquire a German distributor in a deal potentially worth more than £19 million.
The UK-based firm has signed a definitive agreement to purchase the share capital of ProdyTel Distribution, a provider of professional audio and technical solutions products based near Nuremberg.
Through its German subsidiary Kern & Stelly Medientechnik, Midwich will acquire 51% of ProdyTel for an initial cash consideration of £7.4 million. Put and call options are in place for the purchase of the remaining 49% in June 2024 for a fixed amount of £7.1 million. An additional performance-linked payment of up to £4.8 million will be made in 2026.
ProdyTel was founded in 2003, originally as a manufacturer of audio codecs before switching its focus to distribution in 2014. From there, it has developed a strong vendor portfolio, including premium brands Biamp, Aver and Jabra, with a particular focus on the corporate and education market. The company operates across Germany and employs 30 staff. In 2022, it reported revenue of €22 million (£19.2 million) and pre-tax profit of about €4 million.
Midwich Managing Director Stephen Fenby said the deal will strengthen his firm’s technology offering in the DACH region, with customers now being able to benefit from the combined portfolio of ProdyTel and Kern & Stelly.
ProdyTel Managing Director Christian Carrero provided some background on the sale to Midwich.
“Not only have I developed a lot of personal relationships over the past 20 years with many people within the Midwich family, but ProdyTel has often found itself working alongside Kern & Stelly on common projects. From these interactions, I had already developed a positive feeling about the corporate culture in Kern & Stelly.
“I have had quite a few offers to sell my company over the years. Based upon these past interactions, when the opportunity presented itself to join the Midwich family, it seemed only logical.”
The acquisition is subject to approval from the German competition authorities. It will be funded from Midwich’s existing facilities and is expected to be earnings accretive in the first full year following completion.