QSC LLC, which specializes in audio, visual and control systems, has agreed to be acquired by Atlanta-based Acuity Brands with a price tag of $1.2 billion.
Acuity Brands (NYSE: AYI), an industrial technology firm that develops lighting and building management solutions, called QSC “a disruptor” in the industry.
“QSC has built a differentiated cloud-manageable audio, video and control platform that controls what happens in a built space,” Acuity Chief Executive Neil Ashe said in a statement. “Our acquisition of QSC builds on our vision of data interoperability as we continue to make spaces smarter, safer and greener.”
Acuity is paying 14 times QSC’s estimated earnings before interest, taxes and depreciation (EBITDA) for the twelve-month period ended Aug. 31.
It’s one of the largest recent acquisitions announced in Orange County this year. UCI Health, the largest health system in Orange County, in March acquired four medical centers, including three in Orange County, from Tenet Healthcare Corp. (NYSE: THC) for $975 million in cash. Alteryx Inc. was taken private in March in a $4.4 billion deal by Clearlake Capital Group and Insight Partners.
QSC provides high-performance loudspeakers, digital mixers, power amplifiers, software, and accessories, used in various areas including theaters. The Costa Mesa-based company traces its roots back to 1968 when it was formed more or less by chance. .
Acuity shares have almost doubled in the past year to about $304 each and a $9.3 billion market cap. It is expected to grow sales about 5.9% to $4.1 billion in the current fiscal year, according to the average of seven analysts.
Acuity expects the deal to be closed in the second quarter of the 2025 fiscal year, subject to customary closing conditions, and be accretive to Acuity’s’ fiscal 2025 results.
QSC Leadership to Continue
QSC says it has more than 300 employees in Costa Mesa and almost 1,000 globally.
Upon closing, QSC – both Q-SYS and QSC Pro Audio units – will become part of Acuity’s Intelligent Spaces Group.
“The current QSC leadership will continue to lead the business with the same commitment to excellence. Our name, our brands and our locations will remain unchanged,” QSC President Jatan Shah told the Business Journal on Oct. 29.
QSC occupies two buildings in Costa Mesa that are approximately 132,000 square feet in size.
Its customers include Virginia Tech, University of Florida, Royal College of Physicians, Atlantis Dubai, Hard Rock International, Resorts World Las Vegas and Legoland Windsor Resort, according to Shah.
It also works with theaters and movie theaters, the QSC president said.
AV Playing ‘Critical Role’
“Bringing QSC together with Acuity underscores the critical role AV technology plays in live, hybrid, and virtual experiences,” Joe Pham, chairman and chief executive officer of QSC, said in an Oct. 24 statement announcing the agreement.
QSC provides “a cloud-manageable audio, video and control platform that includes controls, sensors and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare and transportation,” Acuity said.
QSC delivered sales of approximately $535 million for the twelve months ended Aug. 31, Acuity said last month.
Leading the company’s success is Q-SYS, a cloud-first platform for audio, video and control, built on a modern, standards-based IT architecture.
“QSC Audio complements these offerings with high-performance loudspeakers, digital mixers, power amplifiers, software and accessories. These solutions empower creators, performers, and entertainment providers to confidently deliver impactful experiences for their audiences,” Acuity said.
QSC said its product uses include corporate, educational, events, cinema and transportation while its international presence stretches beyond North America to Europe and Asia.
Acuity Brands has operations across North America, Europe and Asia. Acuity is powered by over 12,000 dedicated and talented associates.
The company anticipates funding the transaction with cash on hand, as well as adding a $600 million term loan, Acuity said in an SEC filing dated Oct. 24.
How it All Started
The Business Journal dipped into the archives to discover QSC’s origin story. Here is the opening of the story from 2011:
One of the fastest-growing privately held companies in Orange County can be traced back to a motorcycle mishap in an industrial park 43 years ago.
That’s when Barry Andrews’ bike broke down within sight of a budding entrepreneur named Pat Quilter, owner of the Quilter Sound Co.
Quilter was making amplifiers in a 400-square-foot shop in Costa Mesa.
Andrews was a cabinet maker with a busted two-wheeler.
They joined forces and added Andrews’ brother, John, to oversee the company’s finances.
QSC Audio Products LLC was born.
At first it ran on “youthful optimism and negative cash flow,” according to company lore.
Four decades later, QSC has reached $150 million in sales for the 12 months through June, a 43% increase from two years earlier.
QSC’s annual sales have now risen to about $535 million annually.
