Turtle Beach Plans to Acquire ROCCAT
Turtle Beach has announced the entry into an agreement to acquire ROCCAT â€“ a top German PC peripherals company with a history of producing innovative, award-winning gaming mice, keyboards and other accessories.
With ROCCATâ€™s powerful product lineup added to Turtle Beachâ€™s broad market position and leading headset brand, the acquisition significantly accelerates Turtle Beachâ€™s planned expansion into the $2.9 billion1 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 Beachâ€™s strong sales and distribution in North America and across Europe, while Turtle Beach will gain distribution into new Asian markets through ROCCATâ€™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.
Following the completion of the transaction, which is expected in the second quarter, ROCCATâ€™s partial year contribution to Turtle Beachâ€™s 2019 net revenue is expected to be approximately $20â€“$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.
â€œThis is a dynamic and strategically important deal for Turtle Beach,â€ said Juergen Stark, CEO of Turtle Beach. â€œWe are adding a complementary portfolio of PC gaming mice and keyboards, a skilled PC accessories team, and a highly synergistic distribution footprint. â€œThe 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 billion1 PC gaming headset market, as well as directly enables us to address the roughly $1.3 billion 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 PCâ€™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.â€
RenÃ© Korte, CEO of ROCCAT, added, â€œWeâ€™ve long admired how Turtle Beachâ€™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 ROCCATâ€™s strength in the PC peripherals market with Turtle Beachâ€™s 45 years of experience, impressive technology, console dominance, and strong brand will bring even more victories to gamers around the world.â€ 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.