Turtle Beach’s Game-Changing Acquisition: PDP Joins Forces for Unprecedented Growth

Turtle Beach acquires gaming accessories provider PDP, forming a partnership and expanding their reach, with both companies working together to increase scale and opportunities for future growth.

The acquisition of PDP brings together two industry leaders with strong track records of growth and innovation.
The combined company is expected to have projected total revenues of $390 to $410 million in the first full 12 months of ownership and post-synergy Adjusted EBITDA of $22 to $28 million.
The appointment of Cris Keirn as CEO reflects the company's commitment to driving growth and innovation across the business.

Turtle Beach Corporation, a important gaming accessories brand, has made significant changes to its business, capital allocation, and senior leadership following the establishment of a Value Enhancement Committee in 2023. After considering various strategic alternatives, including a full sale of the company, Turtle Beach has announced its acquisition of PDP, a leading gaming accessories provider. The transaction, valued at $118 million, brings together two industry leaders with strong track records of growth and innovation.

PDP, a privately held third-party gaming accessories leader, specializes in designing and distributing aftermarket video game accessories such as controllers, headsets, power cases, and more. By combining PDP’s expertise in gaming controllers with Turtle Beach’s extensive reach and resources, the acquisition is expected to enhance both companies’ scale and create new opportunities for future development.

The strategic rationale behind the acquisition includes projected total revenues of $390 to $410 million in the first full 12 months of ownership and post-synergy Adjusted EBITDA of $22 to $28 million during the same period. Turtle Beach also anticipates cost synergies of $10 to $12 million per year, with potential for additional revenue synergies and cost savings over time. The acquisition is seen as an attractive investment opportunity, offering potential upside in market value for the combined company.

As part of the deal, Diversis Capital, the majority owner of PDP, will become the largest shareholder of Turtle Beach, holding approximately 16% of the pro forma basic shares outstanding. Diversis Capital’s Senior Operating Partner, David Muscatel, will join the Turtle Beach Board.

The consideration for the transaction includes the issuance of 3.45 million shares of Turtle Beach’s common stock and approximately $79.9 million in cash. The Board of Directors of both Turtle Beach and PDP have unanimously approved the transaction.

Looking ahead, Turtle Beach expects significant financial benefits from the acquisition of PDP, which will fundamentally transform the company’s financial profile. The company projects 2024 net revenues in the range of $370 to $380 million, driven by the acquisition of PDP and expected out-performance in specific gaming categories. Pro forma combined Adjusted EBITDA is estimated to be between $51 and $54 million, incorporating approximately 9 months of operations from PDP.

To further drive value for shareholders, Turtle Beach plans to launch a modified “Dutch Auction” Tender Offer to repurchase up to $30 million in value of its common stock. The Tender Offer allows shareholders to indicate the number of shares they wish to tender and the price within a specified range. The Board believes this structure provides shareholders with an opportunity to obtain liquidity while minimizing potential disruption to the share price.

In terms of leadership, Turtle Beach has appointed Cris Keirn as Chief Executive Officer and a member of the Board of Directors. Keirn, who has been with the company since 2013, brings extensive experience in product innovation, operations, and transformation. He has played a key role in the transformation of Turtle Beach’s product portfolios and will continue to drive growth and innovation across the business.

The announcements made by Turtle Beach reflect the company’s commitment to creating substantial value for its shareholders. The acquisition of PDP, the planned tender offer, and the appointment of Cris Keirn as CEO are all outcomes of a thorough review of business opportunities. Turtle Beach is confident that these strategic moves will position the company for future success and value creation.

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Background Information

About Turtle Beach:

Turtle Beach is a brand specializing in gaming equipment, particularly known for its high-quality gaming headsets. Established in 1975, Turtle Beach has been a pioneer in developing innovative audio solutions tailored specifically for gamers, offering a wide range of products that cater to various gaming platforms, from consoles like PlayStation and Xbox to PC and mobile devices. With a focus on immersive sound technology, ergonomic designs, and superior comfort, Turtle Beach headsets are celebrated for their exceptional audio clarity, robust build quality, and advanced features such as surround sound capabilities and noise-cancellation. The brand has built a strong reputation within the gaming community, earning numerous awards and accolades for its dedication to enhancing the gaming experience through audio technology.

Latest Articles about Turtle Beach

About Turtle Beach Corporation:

Turtle Beach is an American technology company founded in 1975. They are a leading manufacturer of gaming headsets, gaming controllers and audio accessories, catering to gamers with high-quality solutions designed for a more immersive gaming experience. Turtle Beach is known for its innovation in gaming audio and voice communication products.