Vitec Group buying audio specialist Rycote for up to £8.5m

Broadcast and photographic products and solutions provider, the Vitec Group, has acquired Rycote Microphone Holdings for up to £8.5m in cash, it announced on Tuesday.

The London-listed company said Rycote, based in Stroud was a “highly respected”, market-leading brand, trusted by creative professionals, and a manufacturer of advanced noise reduction equipment for the audio capture market.

It explained that audio capture remained an “integral element” in the creation of high-quality video content, and Vitec's existing customers - including broadcasters, videographers and independent content creators - already spent money on audio products.

There were reportedly opportunities across all three of Vitec's divisions to sell Rycote products in conjunction with its SmallHD monitors, Teradek transmitters, Flowtech tripods, Anton and Bauer batteries, JOBY GorillaPods and Manfrotto products.

Rycote's unaudited results for the year to 30 April recorded revenue of £3.1m, with adjusted EBITDA of £0.8m.

Vitec said Rycote would become part of its creative solutions division, led by Nicol Verheem.

Simon Davies, Rycote's current managing director, would remain with the company post-acquisition.

The acquisition was in line with Vitec's strategy to enter adjacent markets, the board explained.

Under the terms of the acquisition, the initial cash consideration would be £6m on a debt-free, cash-free basis, including deal costs.

Up to a further £2.5m cash consideration would be payable dependent on post-acquisition performance.

The acquisition was expected to be marginally accretive to earnings in 2019.

Vitec said it now anticipated delivering a full-year 2018 performance “slightly ahead” of its previous expectations, given further foreign exchange benefit and revised trading expectations for the remainder of the year ending 31 December.

“I am delighted to welcome the Rycote team to the group,” said Vitec group chief executive Stephen Bird.

“Vitec operates primarily in the video production market and this acquisition opens up the opportunity for us to enter the growing audio capture market, adding innovative and complementary products for our customers, and creating additional value for our shareholders.

“Rycote has exciting product development plans that will add real value to Vitec and our customers, and we look forward to developing the business.”