Midwich Group buys German distributor prodyTel

Midwich Group buys German distributor prodyTel
Midwich Group has entered a binding agreement to acquire prodyTel Distribution, a distributor of pro-audio products based near Nuremberg, Germany.

Through its German subsidiary Kern & Stelly Medientechnik, Midwich will acquire 51% of the Company's share capital for initial cash consideration of €8.5 million (approximately £7.4 million).  Put/ call options are in place to facilitate the purchase of the remaining 49% of the share capital in June 2024 for a fixed cash consideration of €8.1 million (approximately £7.1 million).  An additional performance linked amount of up to €5.5 million (approximately £4.8 million) will be payable in cash in 2026.

Based in Stein, on the outskirts of Nuremberg, prodyTel was founded in 2003, originally as a manufacturer of audio codecs before switching its focus to distribution in 2014. From there, it has developed a strong vendor portfolio, including premium brands Biamp, Aver and Jabra, with a particular focus on the corporate and education market.  The Company operates across Germany and employs 30 staff.

prodyTel supplements its core distribution services with a suite of value-add services for its trade customers throughout Germany. These services include the prodyTel Academy, offering technology seminars, training courses and product demonstrations to customers from a dedicated 230 sq m space within the Stein facility.

In its latest financial statements, for the year ended 31 December 2022, the Company generated revenues of €22.0 million (approx. £19.2 million) and profit before tax of €4.0 million (approx. £3.5 million). Gross assets at 31 December 2022 were €6.3 million (approx. £5.6 million).

prodyTel's net cash at signing was around €0.7 million (£0.6 million). Completion of the transaction is subject to merger control clearance from the German Federal Cartel Office.

Stephen Fenby, Midwich Group MD, commented: "We are delighted to have reached an agreement to acquire prodyTel, which will strengthen our technology offering in the DACH region. prodyTel has a strong reputation in the market which has enabled it to attract top tier brands. Customers greatly value the expertise the Company is able to offer, and will now be able to benefit from the combined portfolio of prodyTel and Kern & Stelly. We look forward to working with Christian and his team to build on the success the business has experienced in recent years."

Christian Carrero, MD of ProdyTel commented: "Not only have I developed a lot of personal relationships over the last 20 years with many people within the Midwich family, but prodyTel has often found itself working alongside Kern & Stelly on common projects. From these interactions, I had already developed a positive feeling about the corporate culture in Kern & Stelly. I had quite a few offers to sell my company over the years, but based upon these past interactions, when the opportunity presented itself to join the Midwich family, it seemed only logical. I believe this deal can bring prodyTel and its people to the next level in distribution and equally will allow us to share our expertise in audio and AV project management to support Kern & Stelly to further grow its business in Germany. Personally, I am really excited to contribute to the Group with my 25 years of knowledge in the global AV market and am already looking forward to many new and exciting projects and ideas within Kern & Stelly and Midwich." 

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