InMusic seeks to block AlphaTheta Corporation’s $100m Serato acquisition
“In any market when you eliminate competition, it has an effect on consumers. It’s going to raise prices, eliminate innovation and limit choice,” says InMusic CEO Jack O’Donnell.
Image: Future Music Magazine / Getty Images
US audio equipment manufacturer InMusic has threatened legal action in several countries in an attempt to block the acquisition of Serato by AlphaTheta, Pioneer DJ’s parent company.
AlphaTheta announced the $100-plus million buyout last month and said in a statement that both AlphaTheta and Serato will continue to operate as standalone companies after the deal.
Significantly, the move brings under the same umbrella Serato and Rekordbox DJ, which together account for a massive 90% of market share in the DJ software business.
Concerned that the buyout will “eliminate competition”, InMusic has taken out full-page advertorials in New Zealand media to publicise its position. The company says that it will be forced to discontinue a 20-year partnership with Serato (InMusic uses Sertao software in its DJ controllers) should the deal go through, given that Pioneer DJ is a direct manufacturing rival.
“When we work with Serato, we give them our product up to a year ahead of time so they can analyse it and put the software in. If I was handing it to the new dominant player, I’m essentially handing it to my competitor,” InMusic CEO Jack O’Donnell told The Auckland Post.
“I am quite confident what’s happening here and it’s an outrage as far as I’m concerned,” he continued. “In any market when you eliminate competition, it has an effect on consumers. It’s going to raise prices, eliminate innovation and limit choice. So it’s a big thing for a small industry.”
Speaking to the press, O’Donnell said that InMusic had “engaged legal representation in the US, UK, and Japan”.
“While New Zealand is the battleground, this is a global fight, as this is a global issue,” he said. “We’re in early discussions with them, but we think we have legal grounds to fight in multiple jurisdictions.”
As of now, the buyout is still subject to approval by the New Zealand Overseas Investment Office.
