Reply To: Native Instruments Insolvency and Updates

[LinkedMusicians]

Germany’s insolvency process moves much more quickly than the US chapter 11 bankruptcy process. That means that the administrator needs to raise cash to pay of debts more quickly. My estimation — and this is a hot take — based on that and what CDM reported (with the assumption that it is accurate, which we cannot verify) that, as of 2023, NI’s debt was around 10x its revenue — is that it substantially raises the likelihood of NI’s crown jewel (most valuable asset), Kontakt, being sold to another company. I wouldn’t be worried about Kontakt ceasing to exist —  it’s worth far too much money and will raise more capital than any other product/subbrand that NI owns — so with such significant debt, it’s very likely that the administrator will decide to sell it off.

As far as recent acquisitions, we really don’t know enough about the mindset of the administrator, but I would imagine that he could view recent acquisitions that weren’t successfully integrated as easy choices to sell off and raise cash. He’s trying to ensure the continued operation of NI, the acquisitions were clearly not a success, but a significant part of what led to NI’s insolvency.  Imagine if Dirk Ulrich ended up buying back his former company for a lot less than he was paid for it. As a Plugin Alliance and Brainworx customer, I would be very good with that situation.

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