I end 2024 with some pensive thoughts on the future of the AV industry and I will make my own predictions for 2025.
What will happen to Bowers & Wilkins (B&W), Denon, Marantz, Polk Audio, Classé and Definitive Technology?
MedTech Dive reported on Dec 11 that Masimo Corporation, which bought over Sound United and ended up owning the long list of AV brands, is laying off 75 employees in Irvine, California, effective Jan 13.
During the proxy contest, activist investor Politan Capital Management said it would prioritize Masimo’s core healthcare and hospital-to-home markets, divest the consumer audio business and pursue cost reductions to improve margins. (To recap CEO and founder Joe Kiani resigned from the patient monitoring company in September after losing a two-year proxy battle with activist investor Politan.)
Masimo executives, on an earnings call last month, said the company was still evaluating strategic alternatives for its consumer operations. The acquisition of the Sound United consumer audio business for US$1 billion in 2022 was a focal point in the proxy battle.
If Masimo decides against spinning off the consumer business into a publicly traded company, it expects to treat it as a discontinued operation.
My prediction: Some investors or AV manufacturers will buy the more lucrative brands like B&W, Marantz and Denon. The other brands will probably fade away.
What will happen to Klipsch, Onkyo (owned in a joint-venture with Sharp Corporation), Acoustic Research, Singsation, 808, Magnat, MacAudio, Heco, Terk, Audiovox, Schwaiger and Oehlbach?
There is good news regarding the owner of these brands, VOXX International.
On Dec 18, the company announced that it will be acquired by Gentex Corporation in all-cash transaction for US$7.50 per common share.
VOXX International Corporation, a leading manufacturer and distributor of automotive and consumer technologies for the global markets, as well as strategic joint ventures including biometrics, today announced that VOXX and Gentex Corporation have entered into a definitive agreement and plan of merger for Gentex to acquire VOXX in an all-cash transaction. Under the terms of the Merger Agreement, Gentex will acquire all of the issued and outstanding shares of VOXX common stock not already owned by Gentex for US$7.50 per share, representing an aggregate enterprise value of approximately US$196 million.
The US$7.50 per share merger consideration represents a premium of approximately 163% to the Company’s unaffected closing Class A common stock price of US$2.85 on August 26, 2024, the last trading day before VOXX publicly announced that its Board of Directors was conducting an exploration of strategic alternatives in an effort to maximize stockholder value, as well as the public disclosure that Gentex had made an unsolicited proposal to acquire VOXX at US$5.50 per share. After several months of a robust sales process led by a transaction committee of directors unaffiliated with Gentex, working with the committee’s independent financial advisor, Solomon Partners, and meeting with an extensive field of prospective purchasers, both strategic and financial, the transaction was approved unanimously by the Company’s transaction committee and by the disinterested members of its Board of Directors.
Ari Shalam, Chairman of the board of directors of VOXX, stated “the transaction with Gentex ensures a seamless transition for our brands, employees, customers and partners. After a thorough and exhaustive sales process, the disinterested members of the board, the transaction committee and I unanimously support this decision, believing that it represents the best and most reliable path forward to maximize value for all VOXX stockholders. My father, John Shalam, who founded VOXX 60 years ago, and I are incredibly proud of the legacy we have built and the remarkable accomplishments of the VOXX team. We are confident that under Gentex’s stewardship, VOXX’s legacy will continue to thrive for the benefit of our stakeholders.”
My prediction: The new owner will probably focus on the more lucrative brands like Klipsch and Onkyo, and possibly Heco and Magnat. Two other brands — Jamo and Energy — have already been sold to Chinese investors.
Let’s hope for more positive developments in 2025.
