Adventure ends for local management team who took on big boys
BELFAST BRIEFING:ON PAPER, the multimillion-pound sale of one of Northern Ireland’s most promising high-tech firms to a global mobile consumer electronics leader would appear to be a very good result.
In one sense, the acquisition by the British chip-to-wireless technology group CSR of Belfast-based apt-X represents a significant turnaround for a Northern Ireland company whose future was once uncertain.
In another though, it signals the end of an adventure for a local management team who took on some of the big boys in the world of audio expertise and won. Born out of a Queen’s University spin-out, apt-X develops audio compression technology for the broadcast, professional audio and consumer electronics industries.
If you are in the 25-40 age bracket, chances are you have encountered its pioneering technology in either wireless speaker systems, top-of-the-range headphones or Microsoft’s online games network.
The Belfast company’s current client portfolio reads likes a Santa wish list from Apple to Bang O& lufsen, Creative, Jaybird and Sennheiser.
Although it has a 20-year track record in audio expertise, it is only in the last five years that apt-X has emerged as a rising industry star.
It was set up in 1989 to market the apt-X audio compression algorithm developed by Dr Stephen Smyth. It was backed by Qubis, Queen’s venture spin-out vehicle, and Oxford-based Solid State Logic (SSL). Over the next four years, apt-X and its Northern Ireland- developed technology began to attract quite a following. Soon it was becoming incorporated into the systems that supported widescreen cinemas. Dinosaur thrilling Jurassic Parkwas the first blockbuster to feature the apt-X sound-track technology.
The Belfast company enjoyed rapid growth during the 1990s, selling its products across the globe. Over the next 10 years though, it became clear that its English parent company SSL had a different perspective on the company and its abilities.
In 2005, when apt-X was facing an uncertain future, directors Noel McKenna and Jon McClintock led a management buy-out supported by Belfast-based Crescent Capital, Trinity Venture Capital in Dublin and Queen’s University.
It has never looked back.
McKenna’s mission was to plough profits back into what had become a “cash-stripped outpost” of an English company and concentrate on product development.
He decided to develop the business on two fronts – hardware and intellectual property – and separated it into APT Licensing Ltd and broadcast subsidiary APT Ltd – which became apt-X. McKenna set “fairly aggressive targets” to achieve his objective of developing apt-X into an “intellectual property powerhouse”.
“I knew we had much more potential than we might have been given credit for in the early days,” he has said. “We knew the business inside out, we were determined to invest heavily in research and development and to employ the best engineering talent we could find.”
Derry-born McKenna, together with McClintock, did just that – and much more. They took the company, originally based in west Belfast but now in the Northern Ireland Science Park, and built a solid, respected reputation from Hong Kong to Las Vegas.
Last March they sold APT’s profitable hardware division to the French Audemat Group so apt-X could focus on its customer base and licensing apt-X into consumer electronics applications and professional audio markets.
The company may not have a single customer in Ireland but apt-X technology is now a major component in iconic products around the globe. McKenna, who began his career as an electronics engineer, believes apt-X’s culture, which is embodied in its 17-strong, young, enthusiastic workforce, is one that embraces the challenge of being first in the market with the very latest competitor-beating technology.
Despite his pay cheque from the CSR acquisition of apt-X for an undisclosed but estimated multi-million pound sum, he is still adamant that “a very exciting future lies ahead”.