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Topic: Acquisition Of Make Music by Launch Equity

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  1. #1

    Acquisition Of Make Music by Launch Equity

    Interesting news regarding acquisition of Make music by Launch Equity from the Make Music forum.

    http://www.4-traders.com/MAKEMUSIC-I...uity-16536789/

    ..... and this investigation

    http://www.4-traders.com/MAKEMUSIC-I...le-B-16537343/

    My first thoughts are how such an acquisition would impact on Gary, Garritan libraries and our forums.

    What are your reactions?
    Michael
    Patience is a virtue, sensitivity is a gift

  2. #2

    Re: Acquisition Of Make Music by Launch Equity

    And now we know why there was no Finale 2013 this year. This is not a good sign.
    [Music is the Rhythm, Harmony and Breath of Life]
    "Music is music, and a note's a note" - Louis 'Satchmo' Armstrong

    Rich

  3. #3

    Re: Acquisition Of Make Music by Launch Equity

    Interesting, but what becomes of the Finale Music Program. If you 'google' Top Music Program Notation software you can see that (http://music-notation-software-revie...enreviews.com/) Finale does not even show up in the list. Finale's Print Music is number 2, but that's not Finale with the Garritan Instruments. Strange...

    Bill
    We dream to write and we write to dream.

    Challenge #10 Winner

  4. #4
    Senior Member caher's Avatar
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    Re: Acquisition Of Make Music by Launch Equity

    Google Levi & Korsinsky

    They appear to be the ambulance chasers of the merger and acquisition business, launching "investigations" into hundreds of companies in this situation. I don't take them very seriously.

    It is very interesting to read the original offer letter for MM from LEAP filed with the SEC.

    http://www.sec.gov/Archives/edgar/da...0911dex992.htm

    The final negotiated agreement sweetened the pot significantly (about 31%) and is a pretty good deal for the current stockholders. In 2008, I looked into buying a substantial amount of MM stock when it was trading at less than $2.50 per share. It appeared to be a small, well run, and profitable company that was undervalued. For a number of reasons, I chose not to. On closer investigation, it appeared to me that a very small number of trades moved the stock in ways that seemed opened to manipulation. This was ultimately born out, if the situation shareholder situation outlined in LEAP's letter has any basis in fact.

    Looking through the recently released annual report, it is difficult to glean the revenue generated specifically from the Garritan product line since it is lumped in with the notation (Finale) product. MM faces some difficult but not insurmountable business issues going forward. The code base at the kernel level of Finale is quite long in the tooth and needs a significant investment to stay current with computer technology. It appears as if they will have significant competition going forward. The need to get to 64 bit in the Windows environment for instance. Also, a number of long standing bugs never seem to get fixed, probably because they are buried so deeply in the kernal code that it is difficult to fix them without causing many unintended issues. Such is the way wit old code (been there, done that) Steinberg/Yamaha has recently hired the development team laid off by Sibelius/Avid to develop a new notation product. Notion also seems to be coming on strongly. I've heard that Hal Leonard inc. is developing a product line to directly compete with SmartMusic.

    With regards to the Garritan product line, they seem to be having some difficulty there as witnessed by the confusion Aria versions that have cropped up. I personally haven't had much trouble but I spent 27 years doing complex system integration on a much larger scale in the telecommunications industry. They need to keep their eye on the ball and deliver. A good example is GCPO. While it is an excellent product for certain purposes, (some of mine included) it could have been a knockout punch competitor to Hauptwerk if they had taken it all the way. As it was, they scored a ground rule double, so to speak, instead of a home run.

    Chris

  5. #5
    Senior Member caher's Avatar
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    Re: Acquisition Of Make Music by Launch Equity

    Quote Originally Posted by wrayer View Post
    Interesting, but what becomes of the Finale Music Program. If you 'google' Top Music Program Notation software you can see that (http://music-notation-software-revie...enreviews.com/) Finale does not even show up in the list. Finale's Print Music is number 2, but that's not Finale with the Garritan Instruments. Strange...

    Bill
    That list focuses on the low end of the market. None of the top professional level notation products (Finale, Sibelius, Notion etc.) are represented. Right now, Finale and Sibelius (not Sibelius First, their equivalent of Printmusic) are dominate the market with Notion coming up also.

    Given that Avid laid off the entire Sibelius development team in the UK, it looks to me as if they are cutting thier losses in the notation product line. Steinberg/Yamaha hired this team to develop a new notation product.

  6. #6

    Re: Acquisition Of Make Music by Launch Equity

    So, what do the major publishing companies use for printing music. At one time Finale was the industry standard. I know one publishing company on a personal side, and they use Finale.

    I have heard rumors that Hal Leonard has it's own music publishing system, but I know nothing more of it. Any thoughts?

    Bill
    We dream to write and we write to dream.

    Challenge #10 Winner

  7. #7

    Re: Acquisition Of Make Music by Launch Equity

    I knew this news would probably be posted here on the Forum fairly soon. Back when MM acquired Garritan, there was also the news that Launch Equity was interested in buying MM out. Now we see that's happening, and as per the second link Michael posted, possibly without enough notice to shareholders who look like they'll be taking a loss since Launch Equity apparently acquired MM at a bargain price.

    None of us can know how this will effect those of us who have Garritan and MM as an important part of our lives. We need to assume that the new owners want to maintain what they paid for - the line of MM products, which includes the Garritan Libraries. Hopefully we'll experience no change, or only improvements if we do notice change.

    As for the TopTenReviews site that lists what they think are the top 10 notation programs - I've noticed this site before, and they seem to always promote the simplest, consumer-oriented programs that have the easiest learning curves. In this list, neither Finale or Sibelius have their main, flagship programs listed. The light version of Finale (PrintMusic) is just a step behind the light version of Sibelius (S. First).

    Actually, I clicked a link on that page, and they've updated their list, moving MagicScore Maestro to the number one slot. It's a program that seriously deep Finale users wouldn't be interested in, and is definitely aimed at the larger consumer market - The sort of software that promises to be "easy enough for a novice!" and with "no musical knowledge required!" - that sort of thing.

    I wouldn't take TopTen too seriously - They do the same thing with video software, listing all the "Instantly be a Hollywood director and make your home movies really shine!" sorts of programs, rather than software that offers deeper, more flexible tools.

    Back to the acquisition - It is rather sudden. But it's just a big business story of people making money by shuffling around properties like Monopoly players.

    Let's stay positive and trust that when the money men are done playing with their piles of chips, that the people who actually do the work, the creative teams at MM and Garritan, can keep on doing what they do, and that we can keep on making music with the products we rely on and enjoy.

    Randy

  8. #8
    Senior Member tedvanya's Avatar
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    Re: Acquisition Of Make Music by Launch Equity

    To qualify my comment, I was in chemical research all my adult life, a complete idiot on business-money-stocks etc.
    BUT,
    (and I have no idea if we, users of Garritan products are in danger of being lost in a shuffle like this) memories are coming back of Tascam, abandoning us, leaving us with serious investments in the Giga products totally unprotected.
    There should be a LAW, that if you abandon a product, you also have to abandon your rights to protect the product, otherwise, you should give your Customers full and unrestricted use of the abandoned product. Some managed to re-install Gigastudio, some throw it out of their computer in disgust. The best part of this program, their convolution software, was sold to Garritan, who does not support the program but said he will try to build it in, and by now, Garritan is sold to MM.
    Being a Canadian, I can do very little, but you US citizens, should try to suggest a Customer Protection Law, forcing the supplier to drop protection of the product if they cease to support it. This would also influence the selling-buying price of the product, and rightly so.

    Ted

  9. #9
    Senior Member caher's Avatar
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    Re: Acquisition Of Make Music by Launch Equity

    Randy,

    There were two main reasons that I was considering in investing in MM stock a few years back. The first is that I wanted to support a company whose product was something I feel is important to serious music, which is a lifelong passion of mine. The second is that I was looking to "park" a large and unexpected bonus that I received at work. My goal was to have it be part of my quite diversified retirement nest egg. Due to the reason stated in my previous post, that wasn't a particularly good idea from a personal financial management viewpoint.

    If a company does not remain profitable give a reasonable return to its investors, sooner or later, it will no longer be a company. The question is exactly what is "reasonable". Returns can come in three forms:

    1. Dividends to stockholders - Hopefully based on profits. Some companies pay out dividends (not MM!) that not justified by earnings. This tends to keep the stock price high while the company gets cannibalized from within by lack of investment needed to sustain long term survival.

    2. Equity Growth - Investors get their return by the gain in the value of their shares. This can happen for any number of reasons, good, bad, or indifferent.

    3. Sale of assets - A company can sell part of itself and distribute the proceeds of that sale to the stockholders. They can also split the company into two or more entities and issue stock in each of those.

    In the case of MM, I suspect that none of their investors are looking huge profits. This is the kind of company that institutional investors like university endowment funds sometimes favor. LEAP, which may be a investment partnership for those types of investors for all we know, really has two choices here, as I see it. They could invest for the long haul, hoping to turn the company to reasonable profitability. They could also sell off the company to a larger concern that would find MM an attractive component to their existing product line. Roland comes to mind. Another less attractive option is for MM to be sold to a competitor to essentially be eliminated. I don't think this is very likely. Avid is in no position to do this and I don't think Yamaha(Steinberg) would bother.

    When thinking about what a reasonable return should be for investors, I would be shocked if MM could ever return more than 7-8% per year even in the best of circumstances. They do not pay exorbitant salaries to their execs and seem to manage their expenses prudently but they are in a niche market that is pretty much saturated. Remember, if you have $1 million invested these days, you can only expect to take about $30,000 per year without eating your principle. That is not a path to riches for sure.

  10. #10

    Re: Acquisition Of Make Music by Launch Equity

    Quote Originally Posted by tedvanya View Post
    ...There should be a LAW, that if you abandon a product, you also have to abandon your rights to protect the product, otherwise, you should give your Customers full and unrestricted use of the abandoned product...
    I understand what you're saying, Ted - But of course this is exactly the sort of worry we won't be helping ourselves with in connection with this business deal. As I said, we have no idea what's going to happen from this point, but there's no reason to think the companies, MM and Garritan, won't remain stable, with no abandoning of products.

    Randy

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