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Struble Says DTS Brings “Stable, Long-Term Ownership”

“For some time we’ve been profitable and cash flow positive

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 Capital.

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 codecs.

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.”