Investment firm EMH Partners has sold its majority stake in Berlin-based music technology company Native Instruments to tech-focused investment firm, Francisco Partners.
Both EMH Partners and NI’s founding shareholders will remain involved with NI as significant minority shareholders.
In 2017, EMH invested €50 million in Native Instruments, followed by a further investment in 2020 to achieve majority ownership in the company.
While terms of the transaction were not disclosed, a press release issued by the two companies states that “the purchase price reflects the significant value generation during EMH Partners’ ownership”.
With offices in San Francisco, London and New York, Francisco Partners has raised over $24 billion in committed capital since its launch over 20 years ago and has invested in more than 300 technology companies.
Since the company’s formation in Berlin in 1996, Native Instruments has established itself as the one of the world’s most-prominent manufacturers of audio production and DJing software and hardware.
Revenues in NI’s music creation tools increased by 60% since the investment from EMH in 2017 and the company’s monthly active users more than doubled to 1.5m by the end of 2020.
In addition, industry partners on Native Instruments’ technology platforms increased by 60% during this time, according to a press release.
NI employs more than 400 staff throughout its seven offices worldwide.
The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory review.
Native Instruments and its shareholders were advised by GCA Altium and Milbank. Francisco Partners was advised by Raymond James and Freshfields Bruckhaus Deringer.
“There’s never been a more exciting time in music, with more creators producing more high-quality music all around the world.”
Constantin Koehncke, Native Instruments
Constantin Koehncke, CEO of Native Instruments, said: “There’s never been a more exciting time in music, with more creators producing more high-quality music all around the world.
“We’re thrilled to team up with Francisco Partners to enter the next phase of our journey, combining their global resources and expertise with our passionate team, deep relationships within music and proven track record of technical innovation.
“Together we can realize our mission to empower and inspire the global community of music creators and help them to unlock their creative potential.
“Thanks to the support of EMH Partners over the past years we were able to further reinforce and expand our position as the leading digital music creation company, and now look forward to working with Francisco Partners, EMH Partners and the founding shareholders to continue on this amazing journey.”
“We look forward to working together with the management team and the existing shareholder group, utilising our broad operational and strategic experience and M&A capabilities to help the company accelerate its growth trajectory.”
Matt Spetzler, Francisco Partners
Matt Spetzler, Co-Head Europe and Partner at Francisco Partners, who will join the Native Instruments board of directors added: “As an innovator in digital music creation, with a supreme brand recognition and outstanding software technology, Native Instruments is a perfect platform and partner for Francisco Partners.
“We look forward to working together with the management team and the existing shareholder group, utilising our broad operational and strategic experience and M&A capabilities to help the company accelerate its growth trajectory.”Music Business Worldwide
