EMH sells stake in Native Instruments

The transaction is expected to close in Q1 2021.

EMH, plus some key employees and members of the founding team of Native Instruments, will retain a significant minority stake in the business as part of the transaction, according to a statement.

EMH invested €50m in Native Instruments for a minority stake in the business in 2017. EMH deployed equity via EMH Digital Growth Fund, which held a final close in June 2017 on €350m. The company reported revenues of €80m in 2016.

The GP increased its stake in the company in June 2020, co-founder and managing partner Maximilian Kuss told Unquote in December 2020, increasing its share in the company to a majority stake.

US-headquartered Francisco intends to assist Native Instruments with the development of its product portfolio and to consolidate the digital music creation market, according to a statement. The GP is currently deploying equity via funds including Francisco Partners VI, which held a final close in June 2020 on $7.45bn. The fund invests in technology companies in Europe and the US.

Previous funding
3i invested €2m in Native Instruments in 1999 and then €1m in 2001, according to Unquote Data.

BayernLB then backed the music technology specialist in a sponsorless buyout in June 2011 with mezzanine funding.

Company
Founded in 1996 and headquartered in Berlin, Native Instruments produces and distributes hardware and software for DJing and audio production. Its products include samplers and synthesisers, as well as hardware and software production suites. The company employs around 400 staff across seven office locations.

People
EMH Partners – Sebastian Kuss (co-founder, managing partner); Dominik Schwarz (partner).
Native Instruments – Daniel Haver (co-founder, chairman of the supervisory board); Constantin Koehncke (CEO).
Francisco Partners – Mario Razzini (principal).

Advisers
Acquirer – Freshfields Bruckhaus Deringer (legal); Raymond James (corporate finance).
Vendor – Milbank (legal); GCA Altium (corporate finance).

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