Follow Music Trades on Twitter!Like Music Trades on Facebook

The Leading Journal of the Music Products Industry since 1890


EAW's product line is now under the RCF umbrella.

Loud Sells EAW To RCF,
Will Focus On Mackie Brand

Divestiture repudiates prior diversification strategy.

LOUD TECHNOLOGY, parent of Mackie Designs, has sold its EAW division to RCF, a leading Italian pro-audio manufacturer. The sale is part of owner Transom Capital’s strategy to focus exclusively on the Mackie line of mixers and loudspeakers. Reversing a previous diversification drive, in February, Loud spun off its Martin Audio subsidiary to a management group for approximately $15.5 million, and in June sold the Ampeg brand to Yamaha.

“While I have truly enjoyed working with all of the brands in the Loud legacy, now it’s time for us to turn the page and to be entirely focused on building the Mackie brand,” said Alex Nelson, Mackie’s president. “Our companies have long lived in a conglomeration of brands, and I believe going forward all the brands are going to benefit from newfound focus, alignment, and investment. This last divestiture marks a particularly exciting time for Mackie employees worldwide who are now about to embark on a journey of reinvention and revitalization!”

"Simplifying the Loud business
to focus on high quality audio delivery
from consumers to professionals
has always been the focus of our thesis."

Arturo Vicari, CEO of RCF Group added, “The two companies have been very close with RCF, supplying professional drivers to EAW. Both brands successfully expanded around the world, and their histories were often linked. Even though EAW will remain a totally independent company, being part of our group will provide EAW with the necessary investments and focus for a fast and solid growth.”

In spinning off unrelated companies, Loud is returning to its roots, effectively repudiating a diversification strategy that began two decades ago. Greg Mackie had launched Mackie Designs out of the second bedroom of his condo in 1990 and enjoyed overnight success with the 1602 mixer. Five years later, as revenues crested the $100 million mark, he took the company public. Under pressure to sustain double-digit sales growth, subsequent CEOs launched an aggressive acquisition strategy, buying RCF in 1998, and EAW two years later. Reflecting the expanded portfolio of audio brands, the company was renamed Loud Technologies.

The acquisitions doubled Loud’s revenues, from $104 million in 1998 to $207 million by 2001 year-end. However, integrating EAW, based in Massachusetts, and RCF based in Reggio, Italy proved difficult for the Loud management team in Seattle, and the company swung from a $5.5 million profit in 1998 to a $5.6 million loss in 2001. Mounting losses depressed Loud shares, from an $11 high to $3, allowing the private equity firm Sun Capital to take a majority stake by 2003. Sun spun off RCF in 2004, but went on to acquire St. Louis Music in 2005 and Martin Audio in 2007. Sun Capital sold Loud to Transom Capital in 2017. Transom had previously invested in Blue Microphones.

Ty Schultz, the managing partner at Transom Capital Group, concluded, “Simplifying the Loud business to focus on high quality audio delivery from consumers to professionals has always been the focus of our thesis. We are very happy to have found a great new owner for the EAW brand and wish everyone involved much success going forward.”

The leading journal of the music products industry SINCE 1890
© 2018 Music Trades Corporation. All Rights Reserved