Sale of Pure signals setback for DAB development
The British company Imagination Technologies has sold digital radio manufacturer Pure to an unknown Austrian investment company, AVenture AT GmbH, for £2.6m in cash. The deal also gives the buyer an option to buy one of Imagination Technologies’ properties in Hertfordshire for £4.5m. The cash will be used to reduce debts, Imagination Technologies says.
Pure was established in 2002 and employs around 65 people. The unit started making losses in 2009 and its revenues tumbled 10 per cent even though it remained the largest digital radio brand at the time. Imagination put Pure for sale this year after Sir Hossein Yassaie, its longstanding chief executive, stood down in February. He had been a staunch advocate of the Pure brand, having pioneered digital radio from within the confines of the semiconductor sector, and had resisted investor pressure to sell off the brand. Pure, which has been restructured but reported a pre-tax loss of £7.9m in the year to April, according to Financial Times.
Little information was available about AVenture AT, which has been formed specifically to buy Pure. Markus Steck, a director at AVenture GmbH, is quoted on the Pure site praising the company’s “reputation” and “strength of the current product portfolio”. Mr Steck was previously 12 years in Heidelberg at wireless broadband company DBD, as its chief executive.
In November 2015 Pure announced a major six figure on-air campaign and partnership with Digital Radio Norway (DRN) . The partnership between Pure and DRN is aimed at accelerating the penetration of digital radio adaptors in cars and commercial vehicles ahead of Norway’s national FM switch-off 2017.
Part of the criteria for setting a date for a digital radio switchover is to ensure that there are enough compelling and accessible solutions to help consumers convert their cars. Despite over 63% of new cars now coming with digital radio as standard in Norway, there are more than 2.6 million vehicles on the road that need converting. Pure was first to market an in-car adaptor in 2008. DRN is confident that Pure will deliver what is required for the Norwegian transition.
Analysis
Pure revenue was £18.8 million in the year to April. The loss of £7.9m might reflect that the fact that there is not a growing market for the DAB technology any longer. On a global scale the market is limited to just a few countries with a considerable dependence on the UK and also Norway the only country on a FM switch-off trail. But the overall perspective is that the future for stand-alone radio sets is not very bright. The smartphone and in-car radio listening on-line will be serious challenges globally.
"AVenture GmbH" is another German company which went into liquidation in March 2015.
The blurred ownership picture of AVenture AT GmbH might indicate that there are strategic DAB stakeholder investments which not necessarily are located in Austria, which is not a DAB oriented country. Public service and community radio are against any FM switch-off here.
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