Arc International's super Sonic buy

Arc International's super Sonic buy

Chip vendor Arc International has acquired privately held Sonic Focus, a maker of audio enhancement technology.

Arc plans to use the technology to improve the quality of PC, laptop and consumer products available to the channel.

Arc paid $6.5m (£3.3m), of which $1.5m will be paid in Arc ordinary shares over two-and-a-half years, based on performance targets.

Sonic Focus began trading in the 1990s as a means of improving the quality of live concerts when streamed via the internet. Original clients included rock group the Grateful Dead.

According to Arc, its products are widely considered to have the most robust audio solutions for music enthusiasts and bring natural surround sound to digitally compressed stereo files.

Last financial year (2007), the company hit turnover of $1.2m. Tom Paddock, Sonic Focus chief executive, will join Arc as its vice president for audio systems.

Despite Sonic Focus’ small size, Arc’s chief executive, Carl Schlachte, said it is an important acquisition in the firm’s history. “This is all part of our strategy to increase our customer base by delivering on value elements,” Schlachte said.

The specific value elements needed by today’s IT buyers are audio-enabled devices and sound-enhancement software, he said.

“Sonic Focus’s established revenue stream and growing customer list of leading consumer OEMs will complement Arc’s financial and product goals,” he added.

Sonic Focus, on the other hand, will benefit from its ability to create new markets as it is added to Arc’s portfolio. Paddock explained: “We can now offer new, more powerful products to OEMs and their semiconductor suppliers worldwide. This also gives us more chance to expand our reach to a broader range of embedded companies’ devices.”

Sonic Focus has an established customer base of tier-one OEMs. “It was gaining traction in the audio post-processing market. I would like to think we will do the same thing, if not better,” added Schlachte.