Midwich to buy 80% of Italian AV products distributor Prase

Specialist audio visual distributor Midwich has agreed to buy 80% of Italian value-added AV products distributor Prase Engineering for an initial cash consideration of €7m (£6.1m).

The initial purchase price will be followed by four fixed payments of €6.4m (£5.6m) over the next two years. The consideration for the deal, which is expected to be earnings-enhancing in the first full year, will be made from the group’s existing bank facilities.

Based near Venice, Prase was founded in 1993 by Alberto and Ennio Prase, both of whom will continue to run the business. In the year ended 31 December 2017, Prase generated revenues of around €20.4m and profit before tax of €2.2m.

The acquisition marks Midwich's entry into Italy, a territory the company has identified as important in its international expansion.

Group managing director Stephen Fenby said: "The company has a very strong reputation, not only in Italy, but also in the European AV market as a whole. As the market leading professional audio distributor in Italy, Prase has an excellent portfolio of vendor partners and a broad customer base which it services with an extensive range of value add support.

"This acquisition adds to the group's already formidable capability in the European professional and installation audio sectors. We believe that with the acquisition of Prase, Midwich now has a presence in countries representing over 80% of the European AV market."

As part of the deal, Midwich will have the option to buy the remaining 20% of Prase in three years' time or later, based on the financial performance of the company.