Directed Closes Deal For Polk Audio
By Steve Smith -- TWICE, 9/27/2006
Vista, Calif. — Directed Electronics finalized its acquisition of Polk Audio and related financing. The deal was originally announced in late August.
The transaction is valued at about $136 million, Directed Electronics said.
The Polk Audio acquisition greatly expands Directed's high performance home and mobile audio equipment offering. Polk management has joined the Directed team and expects the deal to be accretive to its pro forma net earnings in 2006 and beyond.
“Polk’s leading consumer brand complements our current Definitive Technology product line and gives us the No. 1 position in the U.S. home speaker market according to industry data,” commented Jim Minarik, president/CEO of Directed.
“We are pleased to have the Polk management team join Directed, and we believe this acquisition will create many expansion opportunities for both of these marquee brands,” Minarik added. Founded in 1972, Polk has grown into a leading speaker brand in home entertainment. The company sells its products in all key channels of home electronics distribution including a diverse set of customers such as Circuit City, Tweeter, Fry's Electronics, Crutchfield and AVAD Distributors.
Polk co-founders Matthew Polk and George Klopfer will remain actively engaged after the transaction by using their 35 years of industry experience to provide advice on the direction of Directed's home audio strategy.
Including Polk Audio's approximately $86 million in net sales for the twelve months ended June 30, Directed's net sales would have been approximately $435 million for the same period.
Directed financed the acquisition and related expenses by expanding its term loan by $141 million to a total of $307 million. The company also increased its current $50 million revolver by adding an additional $50 million seasonal revolver for the peak working capital months of October through February.
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