– Acquisition Accelerates
Turtle Beach’s PC Market Expansion
Through ROCCAT’s Full
Portfolio of PC Gaming Accessories –
– Adds New Distribution
for Both Brands in North America, Europe and Asia –
San Diego, CA and
Hamburg, Germany – March 14, 2019 – Turtle Beach
(Nasdaq: HEAR), the global leader in gaming headsets and audio accessories,
today announced the entry into an agreement to acquire ROCCAT – a top
German PC peripherals company with a history of producing innovative, award-winning
gaming mice, keyboards and other accessories.
With ROCCAT’s powerful product lineup
added to Turtle Beach’s broad market position and leading headset brand, the
acquisition significantly accelerates Turtle Beach’s planned expansion into the
$2.9 billion[1]
market for PC gaming headsets, mice and keyboards. By acquiring ROCCAT, Turtle
Beach further strengthens its market position in key PC-centric European
territories, including Germany where ROCCAT is already a well-respected leading
brand. Additionally, ROCCAT will see the benefits of Turtle Beach’s strong
sales and distribution in North America and across Europe, while Turtle Beach
will gain distribution into new Asian markets through ROCCAT’s presence in those
markets.
Turtle Beach is acquiring ROCCAT for
$14.8 million in cash, net of a working capital adjustment, $1 million in cash
or stock (company option), plus up to approximately $3.4 million in earnout
payments.[2] Following
the completion of the transaction, which is expected in the second quarter, ROCCAT’s
partial year contribution to Turtle Beach’s 2019 net revenue is expected to be
approximately $20–$24 million. The Company expects revenues from ROCCAT
products to be over $30 million in 2020, and that the acquisition will be
accretive to net income and EPS in 2020.
“This is a
dynamic and strategically important deal for Turtle Beach,” said Juergen Stark,
CEO of Turtle Beach. “We are adding a complementary portfolio of PC gaming mice
and keyboards, a skilled PC accessories team, and a highly synergistic
distribution footprint.
“The acquisition is also a key step
in achieving our goal of building a $100 million PC gaming accessories business
in the coming years. ROCCAT accelerates our expansion into the roughly $1.6
billion[3] PC
gaming headset market, as well as directly enables us to address the roughly $1.3
billion1 PC gaming keyboard and mice market. We believe our combined
product portfolio is one of the strongest in the industry, covering gaming
headsets for consoles and PC’s, gaming keyboards and mice. Together we will
have 48 core product models to pursue the total addressable market of over $4.7
billion in North America, Europe and Asia.”
Stark continued, “We are thrilled to
welcome René Korte and the ROCCAT team to the Turtle Beach family, as they are a
highly talented group with deep experience in PC accessories and have a similar
focus on providing high quality, innovative products to gamers worldwide.”
René Korte, CEO
of ROCCAT, added, “We’ve long admired how Turtle Beach’s pioneering headsets
have elevated gaming and it is an honor to join forces and bring our great
products to more gamers. I have no doubt that combining ROCCAT’s strength in
the PC peripherals market with Turtle Beach’s 45 years of experience, impressive
technology, console dominance, and strong brand will bring even more victories
to gamers around the world.”
ROCCAT has been
ranked as one of the top 10 best-selling gaming peripheral brands in Europe,
and per recent Newzoo consumer survey data3, is one of the top four brands
for awareness, purchase consideration, and preference for gaming keyboards and
mice in the German PC gaming peripheral market.
ROCCAT recently launched its new Vulcan
Mechanical Gaming Keyboard and latest Kone AIMO RGBA Smart
Customization Gaming Mouse to high editorial and fan praise. The original Kone
mouse has been acclaimed as one of the most ergonomic gaming mouse shapes on
the market and was the first mouse to incorporate RGB lighting into its design.
The new Kone AIMO mouse was the best-selling PC gaming mouse in Germany in the
fourth quarter of 2018.
The Vulcan keyboard introduced ROCCAT’s
proprietary Titan mechanical switch and has become one of the top three
best-selling gaming keyboards in Germany, as well as a best-selling product in
its price tier. The Vulcan’s design was also recognized by winning the 2019 iF
Design Award for its product category.
Turtle Beach is the global leader in
gaming headsets and audio accessories, having held over 40% share of the
console gaming headset market for the past nine consecutive years. In 2018,
Turtle Beach extended its reach beyond the console space, launching a new lineup
of Atlas
PC headsets that drew high praise from leading PC writers and gamers alike.
For the latest
information on ROCCAT’s lineup of PC gaming accessories, visit https://en.roccat.org/.
Wedbush Securities acted as exclusive
financial advisor and Morgan Lewis acted as legal advisor to Turtle Beach on
the transaction. CatCap GmbH acted as the exclusive financial advisor and Lutz
Abel acted as legal advisor to ROCCAT.
About
Turtle Beach Corporation
Turtle Beach (www.turtlebeach.com) has been transforming console
multiplayer gaming since the very beginning with its wide selection of
industry-leading, award-winning gaming headsets. Whether you’re a professional
esports athlete, hardcore gamer, casual player, or just starting out, Turtle
Beach has the gaming headset to help you truly master your skills. Innovative
and advanced technology, amazing high-quality gaming audio, clear
communication, lightweight and comfortable designs, and ease-of-use are just a
few features that have made Turtle Beach a fan-favorite brand for gamers the
world over. Made for Xbox, PlayStation®, and Nintendo consoles as
well as for PC, Mac®, and mobile/tablet devices, having a Turtle
Beach gaming headset in your arsenal gives you the competitive advantage. The
Company’s shares are traded on the Nasdaq Exchange under the symbol: HEAR.
Cautionary Note on Forward-Looking Statements
This press release includes forward-looking information and
statements within the meaning of the federal securities laws. Except for
historical information contained in this release, statements in this release
may constitute forward-looking statements regarding assumptions, projections,
expectations, targets, intentions or beliefs about future events. Statements
containing the words “may”, “could”, “would”, “should”, “believe”, “expect”,
“anticipate”, “plan”, “estimate”, “target”, “project”, “intend” and similar expressions
constitute forward-looking statements. Forward-looking statements involve known
and unknown risks and uncertainties, which could cause actual results to differ
materially from those contained in any forward-looking statement.
Forward-looking statements are based on management’s current belief, as well as
assumptions made by, and information currently available to, management.
While the Company believes that its expectations are based upon
reasonable assumptions, there can be no assurances that its goals and strategy
will be realized. Numerous factors, including risks and uncertainties, may
affect actual results and may cause results to differ materially from those
expressed in forward-looking statements made by the Company or on its behalf.
Some of these factors include, but are not limited to, risks related to the
Company’s liquidity, the substantial uncertainties inherent in the acceptance
of existing and future products, the difficulty of commercializing and
protecting new technology, the impact of competitive products and pricing,
general business and economic conditions, risks associated with the expansion
of our business including the implementation of any businesses we acquire and
the integration of such businesses within our internal control over financial
reporting and operations, our indebtedness, changes in the fair value of our
outstanding warrants and other factors discussed in our public filings,
including the risk factors included in the Company’s most recent
Quarterly Report on Form 10-Q and the Company’s other periodic
reports. Except as required by applicable law, including the securities laws of
the United States and the rules and regulations of the Securities and Exchange
Commission, the Company is under no obligation to publicly update or revise any
forward-looking statement after the date of this release whether as a result of
new information, future developments or otherwise.
All trademarks are the property of their respective owners.
For Press Information,
Contact:
Eric
Nielsen
Step 3 PR
On behalf of Turtle Beach
+1 202.276.5357
eric@step-3.com
Keith Hennessey
UK/EU Communications Sr. Manager
Turtle Beach
+44 (0) 1254 51725
keith.hennessey@turtlebeach.com
Jessica Albiston
Global PR Contact
ROCCAT GmbH
+49 (0)40 30 99 495 239
jessica.albiston@roccat.org
For Investor Information, Contact:
Cody Slach or Sean McGowan
Liolios Investor Relations
On behalf of Turtle Beach
HEAR@liolios.com
[1] Newzoo 2019 Peripheral Market Estimates.
[2] Dollar amounts are approximations converted at 1.13 given that the deal is in Euros. Net working capital adjustment is a current estimate which could change. Dollar value of earnouts (worth up to €3M) will reflect exchange rate at the time of payment.
[3] Newzoo 2019 Peripheral Market Estimates.
3©Newzoo 2019 Peripheral Brand Tracker.