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Muzak gets new owner
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February 2, 1999: 3:51 p.m. ET
Audio Communications Network to buy music company in $350M deal
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NEW YORK (CNNfn) - Muzak L.P., widely known for its elevator music, has agreed to merge with its largest franchisee Audio Communications Network in a deal valued at about $350 million.
Under the agreement, ACN, an affiliate of ABRY Partners Inc. of Boston, will pay $250 million in cash for Muzak and assume about $100 million in debt. The privately-held company will change its name to Muzak LLC as part of the deal, which is expected to close in March.
The current owners, controlled by affiliates of New York-based Centre Partners Management LLC, will retain a small minority stake in the company.
Seattle-based Muzak's claim to fame is the sometimes soothing, often bland, music played on elevators across the country. Formed in the early 1920s, Muzak was an instant hit with department stores and elevator manufacturers, who realized nervous riders of the new moving gadget could be calmed by subtle tones of music.
The company's customer base grew in the 1940s and 1950s when Muzak was seen as a way to boost worker morale and productivity. In the 1980s, the company began to reinvent itself, expanding its offerings to "foreground" music as part of a partnership with Seattle-based music company Yesco.
In the past two years, the company has launched an extensive effort to revitalize its brand, focusing on the 60 different channels of music it broadcasts by satellite plus hundreds of more narrowly tailored and customized programs of music, video and audio messages.
Muzak's resulting "Audio Architecture" reaches some 80 million people a day in the United States and 15 other countries at 250,000 customer locations, including McDonald's, J.C. Penney, Barnes & Noble and Nordstrom.
After the merger Muzak LLC will control some 60 percent of its more than 200 sales and service outlets, up from 40 percent for the predecessor company. The company, which generated $25 million in revenue in its most recently reported quarter, will continue to be operated out of its home office in Seattle. 
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Muzak
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