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BE Sold to FirstCity Crestone - Radio World

BE Sold to FirstCity Crestone

President/CEO Joe Roark says the company remains strong
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Broadcast Electronics has a new private equity majority owner, the latest in a series over the past 15 years or so. Though the new owner specializes in special situations, BE’s chief executive stresses that the 51-year-old company is not going out of business and in fact sees itself in a strong position due to the sale.

I reached out to President/CEO Joseph Roark for his reaction because a rumor was floating at a regional trade show last week that BE’s assets were going to be broken up into pieces. He assured me that the company, which makes prominent lines of transmitters and automation systems among other products, will remain intact.

He said GE Capital, the lead bank among BE’s investors, was over-leveraged and just before the holidays sold its debt position in BE for cash to FirstCity Crestone, a private equity firm that has "deep experience with corporate restructuring and distressed debt," according to its Web site. Roark said the new owners were able to buy the bank debt at a reduced value, reflecting today’s radio industry economics.

BE notified employees, customers and vendors of the sale, he said. The price was undisclosed. According to past Radio World stories, previous private equity owners have included Hoak Capital Corp. and Thompson Street Capital Partners. Audax Group acquired controlling interest in 2006.

That "distressed debt" angle caught my ears; but the change has been good for BE, Roark told me, resulting in lower debt payments that will further improve BE’s strong cash position and allow the company to expedite spending in product and people development in 2010. FirstCity has made a "significant" cash infusion into BE, which now plans to hire people, including engineers, he said. BE laid off nine people in 2009. Roark said despite the recession, it laid off less than 9% of its global workforce over two years.

The company also plans to increase its booth size at the upcoming spring NAB convention after slimming down its exhibit space in 2009.

Broadcast Electronics manufactures transmitters, automation systems and other gear for program generation, audio and data management and inter-facility transport.

Related:
"A Lifetime in Broadcast Equipment," 2008 interview with the late Larry Cervon

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