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LOUD Sells Divisions Lands 5M Loan - ProSoundNetwork.com

LOUD Sells Divisions Lands 5M Loan

By Clive Young. Woodinville, WA (November 17, 2008)--Loud Technologies Inc. has sold its SLM Marketplace catalog, accessories distribution business and proprietary St. Louis Stage Gear brand, along with the Austin guitar and Knilling Instruments brands. The sale comes on the heels of majority shareholder Sun Mackie LLC's November 5 announcement of intent to purchase all remaining outstanding shares; the confirmation of 90 layoffs; and Loud's landing a $5 million loan on November 6.
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By Clive Young.
Woodinville, WA (November 17, 2008)--Loud Technologies Inc. has sold its SLM Marketplace catalog, accessories distribution business and proprietary St. Louis Stage Gear brand, along with the Austin guitar and Knilling Instruments brands. The sale comes on the heels of majority shareholder Sun Mackie LLC's November 5 announcement of intent to purchase all remaining outstanding shares; the confirmation of 90 layoffs; and Loud's landing a $5 million loan on November 6.

St. Louis-based U.S. Band & Orchestra Supplies Inc. purchased SLM Marketplace, Austin and Knilling. "The SLM Marketplace sale, a non-core business unit and product lines, will enable Loud to dedicate its resources and solidify its leadership positions in the musical instruments and professional audio markets," said Rodney Olson, President and CEO, Loud Technologies, in a statement.

The $5 million loan paved the way for the sale, as it was used to close out previous loans that would have had to have been renegotiated for the divisions to be sold.

Ken Berger of KB Consulting--and former senior vice president of marketing for Loud/founder of EAW--weighed in on the recent run of moves at Loud, noting, "There's rumors about them going bankrupt and so on, but that's silly--Sun wouldn't be spending all this money if they were going bankrupt. They're investing in it; that's the opposite thing to do when you think you're in trouble. At the same time, however, they're cutting overhead and operational expenses to make it profitable, which is painful, but probably good in the long term. These are professionals doing stuff on a long term strategy, and this is all part of housecleaning. The 90 layoffs are a very painful thing, but if they create an environment that creates X number of long-term jobs, rather than this continuous bleed, it's probably good for them and the industry."

Loud Technologies Inc.
www.loudtechinc.com

U.S. Band & Orchestra Supplies
www.usbandsupplies.com