Active Audio has just taken a majority shareholding in APG. In an exclusive interview, Paddy Baker and Dave Robinson talk to the two manufacturers to find out what’s behind the deal and how both sides expect to benefit.
APG Audio’s Grégory Dapsanse (right of picture) admits that the French manufacturer’s press conferences at trade expos – particularly Prolight + Sound – have always been conducted with a little “theatre”. Here’s the new loudspeaker product, here’s an enthusiastic user to say a few favourable words, and then – plop, glug-glug-glug, chink-chink – have a drop of zesty organic wine and a piece of exquisite soft cheese. Playing to the audience? Oui, monsieur!
But, in the past couple of years, the dramatics have had to stop. APG Audio had been losing its way and needed a new script. A fresh face to direct the action, if you will. Welcome then, to the opening show of a whole new season. And the head of Active Audio, the steerable column loudspeakers and installation specialist, is in the director’s chair.
Prolight + Sound will set the stage for what the companies are calling an “equity alliance”: Nantes-based Active Audio has acquired 60% of APG’s shares, and Régis Cazin (left of picture), Active CEO, has joined APG in Paris, becoming CEO of both companies on legal completion of the deal (expected to have been completed by the time you read this).
Cazin explains: “I really wanted to keep the existing shareholders as shareholders because they are operational people, and I need them to develop APG and the company.” These include Dapsanse, who has been with the company since 1994 and is moving from executive VP for R&D, innovation and marketing to the role of marketing and business development director; Philippe Frarier, one of the founders of APG in 1978, who moves from CEO to the position of industrial director; and Jean-Luc Moncel, an electroacoustic consultant with long-standing links to the company.
APG Audio had been independent since 2004, following a management buyout from SCV France, which at the time was the largest independent European audio distributor. While, says Dapsanse, the plan had always been to develop APG through technical innovation and international development, by 2015 he and his colleagues felt that it was time “to find another way to manage the company”.
An entrepreneur, Régis Cazin has been a part of several start-ups and also has experience in taking over (and turning around) “distressed’ businesses. Before joining the audio industry, he managed companies making electronics for transportation systems. He joined the audio industry when he took over at Active in 2008; the idea of working somewhere “more fun than the defence industry” appealed to him. The company had been founded in 2002 by his friend Xavier Meynial, who he says was more of a researcher than a businessman.
Cazin says: “I enjoy good sound but I was not a specialist, even if I am an electronic engineer. So I could understand what makes good sound, but what I discovered that in terms of market is it’s very special – it took time to understand that. You have networks of relationships, you have brands with known names, loyalty and existing partnerships: people know a brand for years: unless that brand makes some major mistakes, they will continue to work with them. And they don’t want to take any risks. So it takes a long time to establish a new brand, a new technology.” Active Audio was growing but, for these reasons, not as quickly as he wanted.
Growth from external sources was considered: in fact, Active Audio’s name came up in internal discussions as early as 2014, but “it was too early,” he says.
The two parties made contact last November, at the JTSE show. Right from the start, he says, the idea of the two companies working together just made sense: “Everything was so obvious, the synergies were so readable.” Cazin invited the APG team to visit Active Audio at Nantes “to put all the info on the table. It was clear at the end of the day we had much more synergy than I could have imagined on my own.”
Cazin comments: “My first analysis of APG was they have great knowhow, they have a good image in terms of sound. People are very loyal to the APG brand, and they love the APG sound.” However, “the customers also think there is a lack of innovation for new products and, I would say, a lack of communication for the last two, three, four years.” He points to “a lack of leadership” as a fundamental issue for APG in recent years – the “lack of a real boss giving the direction, giving some targets to achieve”.
Cazin has shifted responsibilities around within the company, producing a clearer structure with more specific individual responsibilities. (Putting a positive spin on the old APG, he characterises it as ���a democracy”.) In his new role Dapsanse is still in charge of product strategy, but not product development. “It was too much,” confesses Dapsanse.
One director is in charge of purchasing and manufacturing, and there is another responsible for R&D – “and we are building a schedule of product launches for the next 36 months,” says Cazin. In addition, as part of a new investment plan, recruitment has already started within the R&D function. “That’s very important, because if we want to develop we need to add new products, so we will increase the development forces.” Cazan says he is committed to this expenditure, and it could even increase if sales outperform expectations.
Both men are enthusiastic about these new arrangements. “The compatibility of the companies and management and philosophy is really, really strong,” says Dapsanse.
Cazin says: “I’m still amazed to see so many synergies – much more than I expected at the beginning before knowing APG deeply.” First, there’s the obvious one of having the sales force working across both brands. As far as distributors are concerned, Cazin notes: “The idea is to keep the two networks separated, but with mutual know-how, and of course if one can aid the other, it will be done.” However, in territories where one brand is not represented, it is hoped the other brand’s distributor will step in. “They are not obliged to do this, but it is an opportunity.”
There are also technical synergies to be gained: “In the field of digital signal processing, which becomes more and more important in the pro audio industry, I can say that Active Audio is really strong in that field” – and so it can share its knowledge and speed up APG’s product development in that area.
There’s more too, he hints: “It’s too early to tell you what, because it’s just at the beginning, but we have ideas for products that could merge the technologies of both companies.”
That’s not to suggest any blurring of the brands. “In terms of market and products, we want to keep the markets as they are now,” says Cazin. Broadly speaking, low-power loudspeakers, generating up to 95-105dB SPL are typically Active Audio products; high-power speakers are APG’s territory.
APG’s next product launch will be the Uniline Compact, at Prolight + Sound – a development that, Dapanse stresses, predates Active Audio’s involvement. Its predecessor, the Uniline – a modular line array range that can be scaled to suit small venues all the way up to large festivals – was launched five years ago. “After a few years without launching a main innovative product, we decided to come back to development… So this was the task of 2015 – going back to the DNA of APG.”
He continues: “So we are there with new products in non-conventional line array, with our modular concept, and also an important extension of the electronics range. Now we will have a complete range of electronics with external processors, simple amplifiers but also now built-in DSP amplifiers, to cover the full spectrum of customers’ needs.”
The companies share another philosophy when it comes to the actual building of the boxes. All assembly, for both brands, is in France. Component sourcing for APG is 90% from France, less for Active Audio. “Assembly, we want to keep in France,” insists Cazin, “but we have to save some purchasing costs and so probably for APG we will have to find other suppliers.”
“We had an exclusive partnership with PHL, [a driver manufacturer close to Paris] – and that was very practical for us,” reveals Dapsanse. “For the next step, it makes sense to open the door to other manufacturers – in Italy and Germany – that will give us opportunity to be more competitive.”
“But we want to keep that ‘Made in France’ feel,” emphasises Cazin. “With Nexo and L-Acoustics [here], we really have an industry to do this, so let’s do it!”
What about the market focus? While Active Audio is totally committed to the installation market, with products such as the StepArray digital steerable array and the Ray-On column loudspeaker, APG’s loyalties are around 60% rental and touring and 40% installation.
“Over the last five years we focused a lot on the rental market. But now we think it’s time to extend our market in theatre, sports halls, houses of worship… There are a lot of good examples of markets we could address together with Active Audio, because more and more we see in fixed installation markets, for new venues, there is a requirement for PA messaging and a high-powered sound systems. Consider the Asian market, there is a particular market for the casinos, hotels with bar rooms, restaurants, karaoke… we can supply the whole thing. That makes sense for integrators and sound designers: that they can get the same global support from two French companies supplying the whole system… that could be easier to manage, to design, to integrate. That is part of the strategy.”
There’s plenty more to get excited about with the new arrangement: Prolight + Sound will see both brands sitting on the booth of their new German distributor, AHA Audio. (Dapsanse quips, “When people first hear APG speakers, they say, ‘A-ha!’”). What’s more, Active Audio – which still has its own development agenda, of course – will debut an EN54-certified loudspeaker.
The curtain goes up in Frankfurt. Mesdames et messieurs, take your seats: but be ready to give Active Audio and APG a standing ovation.