Chief/Sanus CEO: Business As Usual After Acquisition

By John Laposky On Jun 2 2008 - 6:00am

Last month's acquisition by The Duchossois Group of Milestone AV Technologies, the maker of flat-panel and home theater mounting solutions under the Chief and Sanus brands, is expected to have little effect on the company's marketing efforts and distribution plans, at least in the near future, according to Milestone CEO Scott Gill.

Despite Duchossois' portfolio of established custom A/V brands — among them systems-integration supplier AMX, and Actiontec and Freeplug, suppliers of networking solutions — Gill said Milestone will operate as a wholly owned subsidiary of Duchossois, but will follow its own course.

"We've been successful with our multi-brand marketing strategy over the last four years so we don't foresee any changes in that area," Gill told TWICE. "We will certainly look to share best practices with our new sister companies, in an effort to make us all more successful in meeting customer needs in our respective market segments — but it is unlikely that would result in any significant changes in our distribution strategies."

Asked if consolidation was a possibility, Gill said: "We certainly don't plan to consolidate the Chief and Sanus Systems brands. Both are very strong and have been supported for decades by our great dealer base. We're already looking at ways to be smart about collaborating with our new sister companies, but only where it makes sense for our dealers."

Gill stressed that Milestone is poised to take advantage of growing consumer demand for flat-panel mounting products "We really concentrate on growing our sales position. Across the various Milestone brands, we do believe we have leading market share," Gill said "In the flat-panel and A/V mounting market, the consumer market has been growing significantly faster than the commercial market over the last five years, so there has been an inversion from what was a commercial-dominated market to one that is more consumer segment focused."

Gill also addressed the growing number of offshore and low-end suppliers in the mount market, indicating that the Chief and Sanus brand names are particularly strong in the mid- and high end of the market. "All CE product categories, including mounting solutions, have low-end alternatives. But that is almost invariably not where the profitability potential lies for CE retailers," Gill said. "If a retailer stocks a cheap SKU that has a higher return rate, is not supported by a consumer hotline, and is not backed by a long-term partner, any incremental 'savings' will be quickly erased."

Gill continued: "By delivering easy to install branded products with great features and aesthetics, retailers should be able to deliver real value to their customers while maintaining profitability."

Financial terms of the all-cash acquisition were not disclosed.

Milestone had been owned by a group of private equity investors led by Friedman Fleischer & Lowe, based here. Milestone was formed in 2004 when the two leading mounting solutions companies at the time, Chief Manufacturing and Sanus Systems, were merged.

The deal made sense for Duchossois, adding two more recognizable brand names to a growing stable of acquired companies in the custom installation sector.

"Milestone possesses all the criteria we look for in an operating platform — the most innovative and highest quality products sold into growth markets, leading brand names and, above all, an exceptional management team," said Robert Fealy, executive VP of Duchossois.

Milestone has approximately 400 employees worldwide.

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