Struble Says DTS Brings “Stable, Long-Term Ownership”
A graphic on the DTS website notes the acquisition.
“It’s unqualified good news
for the broadcast industry.” That’s Bob Struble’s take on the sale of iBiquity
Digital Corp. to DTS.
The pending acquisition was
announced early Wednesday morning; Radio World reached Struble, iBiquity president and CEO, for comment on the sale.
DTS is a publicly held company;
its stock trades on NASDAQ. Struble said the companies have “known each other
for years.” Both, he said, are technology developers and intellectual property
developers; and DTS in 2009 acquired Neural Audio, a company with which
iBiquity had had prior dealings.
IBiquity is privately
held right now; at one time broadcast groups were a significant part of its
ownership, but over the years, that changed and the largest of its owners now
are financial firms: Bank of America, Columbia Partners and Silver Point
He described DTS as a better fit. “For the last
many years we’ve been owned by financial investors; they’ve been great owners
but not the kind of guys who can help us get to the next level.” DTS, he said,
is “in the space; we’ll be a big strategic asset for them.”
From his perspective, he said, “The reason they purchased us was that they’re
very attracted to the business we’ve built, and have every intention of continuing
the growth. I expect additional improvement, promotion, strategic and
functionality … [It’s] stable, long-term committed ownership.”
He said DTS has only a limited presence in iBiquity’s core broadcast
markets. While DTS is active in OEM automotive, iBiquity’s footprint there is
greater right now: “So it’s a complementary business overlap. The technology is
also largely complementary,” with DTS known for audio quality products and
Struble expects no changes in the operational
structure of the company; he’ll lead the HD Radio business, and its offices in
Maryland, New Jersey and Michigan will “become part of the DTS family.” He said
the international reach of DTS will help with iBiquity’s growth efforts abroad.
We asked Struble to describe iBiquity’s current revenue. He
declined to share dollar amounts, citing confidentiality during an acquisition by
a publicly held company. Many broadcasters are aware of the licensing fees that
the company charges stations; we asked Struble how big a part of its business that
represents. He said average revenue when a station goes on the air with HD Radio
is about $8,000. “That is a wholly immaterial part of our business model,” he
replied. “We make our money on the sale of HD Radio receivers.”
He said that with millions of radios now being sold, mostly in
cars, “you’re able to build a good business. For some time we’ve been
profitable and cash flow positive.”
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