Under New Owners, BE Eyes Future Products - Radio World

Under New Owners, BE Eyes Future Products

Broadcast Electronics officials say an equity firm's acquisition of the company will give the broadcast systems provider the financial means to expand its HD Radio product line further and increase its presence internationally.
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QUINCY, Ill. Broadcast Electronics officials say an equity firm's acquisition of the company will give the broadcast systems provider the financial means to expand its HD Radio product line further and increase its presence internationally.

Thompson Street Capital Partners, based in St. Louis, joined with some managers at BE to acquire the company from Hoak Capital Corp. in late January. Financial details of the agreement were not released.

Broadcast Electronics President and CEO John Pedlow said the new equity partners would allow BE to fortify its position in the marketplace with new products and services.

"Certainly we are heavily involved in the HD Radio initiative, from the transmission equipment side of it to data transmission. We have a whole array of products we are working on for wireless digital data. Having the new investment partner will support our ability to do that. This a going to be a good thing for the company."

Pedlow said BE has the advantage of controlling "both pieces of the equation" when it comes to supplying data transmission capabilities to radio broadcasters.

"We have the transmission hardware, but we also have a leading position in automation systems. We think that being able to link those two together to provide content for the HD Radio data channel is significant for us. Data transmission is going to be a big part of what we do."

No structural changes in BE management is expected, Pedlow said, which means the company can continue to focus on growth.

"The most encouraging thing is that our new ownership is very supportive of us. Their marching orders to us (were) to keep doing what we are doing," Pedlow said.

BE employs about 135 at a 70,000-square-foot manufacturing facility and headquarters in Quincy, Ill.

Pedlow said several members of management at BE are participating in the new venture, but that Thompson Street Capital Partners is the lead investor.

Thompson Street Capital Partners is a relatively young firm focusing on mid-market investments and companies about the size of BE. It looks for businesses that lead within their market sector and sectors that have growth potential, he said.

"They were impressed with our position in the marketplace and also where the radio market will head over the next five years considering the development of HD Radio," Pedlow said.

BE's relationship with Hoak over the years was "terrific," Pedlow said, but the fund was "very mature and nearing the end of their investment life and there were some things we couldn't do. We are on the front end of HD Radio development." Now, he said, the company can move forward.

Radio station engineers at WWDC(AM) in Silver Spring, Md., founded Broadcast Electronics in 1959. The company first produced cart machines in a garage at the station.

It moved to Quincy, Ill., in 1977 to take advantage of the central geographical location. BE entered the RF transmission business in 1979 with the introduction of the FM-50 exciter. It added the AudioVault line of hard-disk storage systems in 1990.

BE was acquired by Hoak Capital Corp., a private equity firm based in Dallas, in 1996.

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