Reply To: Native Instruments Insolvency and Updates

[LinkedMusicians]

@fossile It appears that NI was well managed on a day-to-day operations level. It’s the acquisitions and massive debt vs. earnings that led to their insolvency. Their acquisition spree occurred during the post-COVID home-studio boom, so they paid top dollar for everything. When interest rates rose, all of their earnings went to paying down the debt (again, according to CDM’s report, their debt was roughly 10x their annual earnings).

So, it’s basically a given that there will be an asset deal — an intellectual capital transfer — where the buyer doesn’t inherit the debt obligations. No sane business person/company would take on the level of debt NI has accumulated. Those assets include NI’s user database and activation servers. Here’s where current NI customers should take note — the new buyer has a strong motivation to keep the activation servers running — they need to do that to maintain the value of what they purchased. So, it’s very likely that NI customers’ existing licenses will transfer to the buyer of the new company (let’s say Kontakt for this example).

For us long-time NI customers, when Francisco Partners first bought NI—they moved everyone over to the “Soundwide” ecosystem, and our serial numbers us there. Hopefully, that is what will happen in this case.

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