Rich Lister returns to his rock’n’roll roots with $180m US deal

According to Freedman, the group received (and rejected) a recent private equity offer at 15 times EBITDA, a metric that reached $106 million in 2020-21 before pandemic supply chain bottlenecks reduced it to $82 million in 2021-22. A 15-times multiple would imply a valuation for Mackie of $US225 million ($337 million).

Buying Mackie also represents a return to Mr Freedman’s roots, providing the public address systems for bands in the rough-and-tumble bars and clubs of 1980s Sydney.

‘Bands and buskers’ market

The 65-year-old made his fortune, estimated at $1.35 billion on this year’s Rich List, manufacturing and selling microphones and other home audio equipment, including a podcast mixing console that proved wildly popular during the pandemic.

However, the family business was started by his father Henry in 1968 as an installer of sound systems in venues such as Kings Cross’s Chevron Hotel and Souths Juniors Rugby League Club, a tradition Peter Freedman continued at the latter in 1985 by establishing Bunnies nightclub.

Mackie’s live mixers and loudspeakers put Mr Freedman firmly back in what he calls the “bands and buskers” market, which he sees aligning with Rode’s “content creator” customers who want well-built equipment at approachable prices.

“Both brands helped fuel the democratisation of DIY recording in their own way,” he said.

“And the live music thing is coming back like crazy everywhere, so it’s perfect.”

In a tight skills market globally, Freedman said the addition of Mackie’s 85 staff – the majority of them audio engineers – to Freedman’s 500-plus headcount was also attractive.

Mackie, which has been owned by Californian private equiteers Transom Capital since 2017, oversees contract manufacturing of its gear in Shenzhen.

Mr Freedman said some of that activity would be shifted to Rode’s advanced manufacturing hub in Sydney, which has 26,000 square metres of factories and warehouses in Silverwater and Greystanes, and housing precision machinery valued at more than $500 million.

“With the set-up we’ve got here, there’s a lot of things we can do cheaper than China,” he said.

However, he said the Shenzhen facility, established in the early 2000s, would be retained and there were opportunities to ship some Australian-made components there to be assembled at scale.

Mr Freedman and his group chief executive, Damien Wilson, saw enough synergies in Mackie to complete the deal unusually quickly. Wilson said the initial email from Transom hit his inbox only on August 17.

“It helped that it was kind of our second rodeo,” Mr Wilson said, after Rode did due diligence and positioned itself for a different acquisition a year ago, which ultimately did not get completed.

Former treasurer and Rode director Joe Hockey said it was “exciting to see Rode continue to invest in their future.”