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Roland, Cakewalk Agreement Clarified

“At the end of the day, it’s not a whole acquisition.”

Roland has increased its investment in Cakewalk, with which it has had a long business relationship.

Pro Sound News reports, however, that the January announcement, which was published in the NAMM Show’s daily publication, has sparked some confusion among the pro audio industry and audio professionals.

The story from Pro Sound News:

Cakewalk founder/CEO Greg Hendershott wrote to Cakewalk customers in January, stating, in part, that “We’re announcing an expansion of our strategic relationship with Roland. This is the natural progression of a relationship that goes back more than a decade. In 1995 Roland began distributing Cakewalk products in Japan. In 2003 Roland invested in Cakewalk to help fund the development and marketing of joint products. At that time they also started distributing our products in many markets outside the U.S. Now in 2008, Roland is increasing their investment in Cakewalk, and together we are committed to creating a series of impressive software/hardware joint products.

“Although Roland now owns a bigger share of Cakewalk, they didn’t acquire the whole company. Cakewalk is not becoming a ‘division’ of Roland. On the contrary, we remain committed to developing stand-alone software, as well as hardware/software products. We’re updating our logo today, to prepare you for seeing it on some very exciting joint products in the months and years ahead.”

Yet some news reports suggested an outright acquisition, and Cakewalk public relations director Steve Thomas allows, a reference to future products being branded as “Cakewalk by Roland,” in The Upbeat Daily, fueled confusion. “I’ve heard so many extreme characterizations of this,” says Thomas. “The most ridiculous one is that the whole shop is closing and we’re all moving to California, which is not happening.”

Acquisitions, in recent years, of software developers such as Steinberg and eMagic, Thomas adds, may have predisposed people to assume the Roland/Cakewalk announcement was a similar occurrence. “There’s enough of that out there that people are going to wonder — that makes sense,” he says. “Putting it all in proper context is what [Hendershott’s] customer letter was about. There has been a standing relationship between these two companies — Roland and Cakewalk — that goes back over a decade. There’s been a progression of events and getting closer together as far as [an] alliance for strategic reasons and partnership. Having the economy of scale to have Roland and their distribution subsidiaries take over our worldwide distribution a few years ago was a good move by us.

“At the end of the day, it’s not a whole acquisition,” Thomas continues. “They have a majority stake in the company at this stage, relevant to stock ownership. However, the general day-to-day in the course of how we’re proceeding hasn’t changed. Greg Hendershott is at the helm, as well as all of us that have been key to getting it to this point.”