Native Instruments file for insolvency...

[surreal]

Basicly a bunch of Pirate bloodsucking Parasites

[michat]

I think it'd be a pity if they go down. Bought Battery 1 and 2, Reaktor 3 and then the Komplete packs. I used Kontakt as main sampler (even preferred it for scuplting my own drums, need 2 to 3 envelopes with different timings and depths to get that perfect kick), rarely used the presets and was heavily into using Reaktor since V4. Even today using Reaktor in my standard Ableton Live sets (2 self built delays with feedback and phase accurate filters with volume compensation and a Ringmod) and the two reverbs. Also using the two reverbs as standard send effects and the eqs as inserts. What the founders initially did was great at that time, what happened in the last 10 years made me stop paying for updates, though. I hope this company will survive in a form where they go back to the roots and come up with some great inventions in the future.

[darkydisco]

It’s a dream but Roland would be the perfect buyer of NI. There is essentially no overlap between their software and hardware products.

NI outside of a few eqs, compressors, reverbs and I guess monark don’t do vintage recreations. They do zero Roland emulations, the majority of their products live in their own digital world, they are original creations.

Rolands plug-in offerings are essentially all vintage emulations of their own hardware stuff with a few odds and ends mixed in.

In hardware, NI does controllers, while Roland does actual instruments and effects. It’s a match made in heaven.

[IvyBirds]

It’s a dream but Roland would be the perfect buyer of NI. There is essentially no overlap between their software and hardware products.

NI outside of a few eqs, compressors, reverbs and I guess monark don’t do vintage recreations. They do zero Roland emulations, the majority of their products live in their own digital world, they are original creations.

Rolands plug-in offerings are essentially all vintage emulations of their own hardware stuff with a few odds and ends mixed in.

In hardware, NI does controllers, while Roland does actual instruments and effects. It’s a match made in heaven.

And you to can have to phone home every month and deal with all the issues of Roland Cloud Manager, no thanks hard pass

Zenology Pro also has significant overlap with Kontact in that it's a sample based system that while it can emulate vintage Roland Hardware, on lots of the sample sets it doesn't

Does that mean Zenology is as good as Kontact? No but Roland will tell you it is

[IvyBirds]

The debt is mostly coming from the PE deal.

The PE fronts a small slice of the capital and the rest is negotiated with creditors. A holding company is formed and that company buys the target company. This company contains both the private capital and the debt owed to creditors.

Once the sale goes through the holding company is integrated with the target company either through a merger or by becoming a subsidiary. Either way the target company assumes all the debt used to buy it. This is mandatory.

This is what happened with NI. PE works best with companies that are boring and predictable like utilities and not so much with creative companies that can be more susceptible to market fluctuations.

In this case, because the cited 300 million debt is mostly going to be PE debt from the LBO and the acquisitions of Izotope and PA the insolvency will almost certainly tell the creditors that they're going to have to take a haircut because part of PE is assuming the risk that this will happen.

The small slice of equity capital by SF Partners will be certainly wiped out and the senior creditors will most likely get a debt to equity swap.

There's a pervasive notion here that NI are a completely valueless ongoing concern. They're one of the biggest and most recognisable music software brands with a bunch of valued IPs.

Bankruptcy and liquidating the company would yield a lot less than wiping the debt and creditors assuming ownership of a restructured company. It would be a nonsensical move.

In other words NI are much more valuable as a whole than the sum of their parts.

Besides, German insolvency policy strongly favours rescuing companies over liquidation.

Like I said no one is going to buy NI and assume it's $300 million dollar debt, it doesn't matter where they sent came from it's still debt

Beyond the debt, NI's other significant issue moving forward is going to be a lack of confidence in the company creating lack luster sales. While German Law favors rescuing companies they need to be able to sell things and have positive cash flow in order to be rescued

Who is out there that is not already invested in the Native Instruments ecosystem that will now drop hundreds or even thousands on Komplete? And for all of us (myself included) that are already invested in the Native Instruments ecosystem who is going to spend even more and on what?

Eliminate the debt to zero awesome, NI still has an outdated and stagnant product line because they haven't invested in innovation and upgrading of the bulk of their legacy products. How many if us (myself included) are still using older versions of Komplete or Kontact because there has been no compelling reason to upgrade for several product cycles now

And while NI has been stuck in a rut, and stagnant, the rest of the plugin industry has not been. Alternatives and very good ones at that, exist for everything NI offers

Now take that outdated and unexciting product line in a cash strapped company and where does the money come from to improve it? Are banks going to loan them money after they were just forced to write off hundreds of millions in losses? Are sales going to sky rocket in the old product line creating cash flow that can be reinvested into creating new products? Of course not

So where does that leave NI 6-12 months from now? Or 2-3 years from now? Where is positive cash flow going to come from? How do they instill confidence in the marketplace? How do they create new and exciting products and update legacy products in compelling ways? How do they compete with increased competition with other more innovative plugins and sample libraries? They don't, they are dead and should be chopped and sold off

[Essent]

The PE fronts a small slice of the capital and the rest is negotiated with creditors. A holding company is formed and that company buys the target company. This company contains both the private capital and the debt owed to creditors.

Which creditors? Who are they?

[SLiC]

If there is no money in the bank and no more credit, payroll is the biggest problem...that's what bankrupts companies fast.

[Super Piano Hater 64]

The PE fronts a small slice of the capital and the rest is negotiated with creditors. A holding company is formed and that company buys the target company. This company contains both the private capital and the debt owed to creditors.

Which creditors? Who are they?

Short answer? Banks.

Which banks? Well, we don't know that.

A lot of details we don't know will be critical to deciding what happens to the company. For example, the officials in charge of the insolvency process have to carry out an investigation to see whether it's even possible to break up and sell off the product catalog. I'd bet that hardware would go first, but NI software is notoriously a mess of bespoke in-house tech stacks shared with all their other software. I suspect that any attempt to break up Komplete would rival the expense of rebuilding it from the ground up. But, again, we don't know the essential details, so this is a pretty wild guess on my part.

[BJ]

I hope they sell to the Saudi's I need a good deep sampled rababa.

[Essent]

The PE fronts a small slice of the capital and the rest is negotiated with creditors. A holding company is formed and that company buys the target company. This company contains both the private capital and the debt owed to creditors.

Which creditors? Who are they?

Short answer? Banks.

Which banks? Well, we don't know that.

A lot of details we don't know will be critical to deciding what happens to the company. For example, the officials in charge of the insolvency process have to carry out an investigation to see whether it's even possible to break up and sell off the product catalog. I'd bet that hardware would go first, but NI software is notoriously a mess of bespoke in-house tech stacks shared with all their other software. I suspect that any attempt to break up Komplete would rival the expense of rebuilding it from the ground up. But, again, we don't know the essential details, so this is a pretty wild guess on my part.

How could banks be so stupid? As someone else mentioned before, by nature of the business there is a volatile aspect to every company in this industry, especially regarding the high numbers of NI employees. I mean: if you do not release new (ground breaking) products you only need employees for maintenance.

[Weasel-Boy]

How could banks be so stupid?

Wouldn't be the first time. Remember the sub prime mortgage crisis that collapsed the US economy around 2008?

[mixyguy2]

I just heard Bad Bunny is going to buy NI so no worries

Hurray, then it will all be in Spanish

[martinjuenke]

How could banks be so stupid?

Wouldn't be the first time. Remember the sub prime mortgage crisis that collapsed the US economy around 2008?

Banks haven't paid for their greed, the taxpayer did.

[mambo888]

Just want to chip in regarding the “bean counters”, who destroy companies, bla bla bla

Most times what destroys companies is the sales and marketing department, they project growth that they cannot sustain and they go in an excessive spending spree wasting the companies resources. By the time the company goes down they already work for another company.

The bean counters aka. Accountants can see the fall miles away and tell the CEO and management: don’t do it. Please don’t do this. The CEO and management with their big ego thinking they know everything better ignores them and still take the loan or whatever stupid action or acquisition.

Later when the company goes insolvent everybody blames the bean counters…Who warned well in advance, shouted, fought, risking being fired, begged to stop but the management didn’t listen. It’s not greed, it’s ego and gambling that destroys companies and the constant pressure to win and decorate their CVs as CEO or whatever bs position they have.

[dayjob]

What have they been spending all the money on?

The bean counters and the experts in the management department

They've done a great job of sailing the ship onto the rocks

marketing and hardware development, which is expensive. also, one thing venture capital does is buy a company then move the debt from the purchase to that company.

That's Private Equity.

Venture Capital typically invests equity into early-stage companies and doesn’t load them with acquisition debt. The payoff is that if the company does well they have a fully owned stake in the company. No debt to service etc.

PE, by contrast, often uses leverage to finance acquisitions, and the acquired company ends up servicing that debt.

oh thanks.. so often they all seem to be like the peanuts in each other’s shit.