Hanover Tunes Into Audio Precision –

Hanover Partners this month agreed to purchase Audio Precision, an audio equipment testing manufacturer, for more than $20 million.

Quechee, Vt.-based Green Mountain Partners led the debt financing and provided some equity for the deal.

Audio Precision is expected to generate approximately $15 million in revenue this year. The Beaverton, Colo.-based company makes electronic instruments used to test and measure audio signals in high-end audio and broadcast equipment.

Its customer base is international and includes audio equipment manufacturers such as Dolby Labs, Sony, Panasonic, Motorola, Texas Instruments and Harman.

John Palmer, a Hanover principal, said this deal is unique because it is more high tech than typical leveraged buyouts tend to be, especially ones sourced by his firm.

“We’re used to doing pretty basic industry deals and this is a company that has a much higher level of engineering talent on its payroll,” Palmer said.

Audio Precision not only has consistent revenue, Palmer said, but has solid cash flow with 25% operating margins that are likely to remain stable.

“We feel like we can use this company as a platform and take it in any number of directions, which we will work with management to plan,” Palmer said.

Portland- and San Francisco-based Hanover has established a broad-based employee stock option plan for Audio Precision which will enable company ownership by senior management and other employees.

Hanover Partners teamed up with Green Mountain in its last deal as well. The firm purchased Rugby Manufacturing Co., which makes hydraulic scissor hoists, dump bodies and truck platforms for the light- and medium duty truck industry, earlier this year.