Clifton, N.J. - Gemini Industries has reached an agreement with Recoton to acquire the bankrupt company's consumer electronics accessories business.
Recoton filed for Chapter 11 protection earlier this month.
As part of the agreement with full-line accessories provider Gemini, Recoton and Gemini have entered into a transition agreement which, among other things, will provide Recoton's customer base with a continuity of timely delivery of products and essential services. No purchase price has been disclosed.
The proposed transaction includes Recoton's Jensen, Acoustic Research, Advent, Discwasher and Ambico branded accessories. It does not take in the Jensen, Acoustic Research and Advent audio products.
'We highly value the Recoton accessories business because it is so complementary to our current business, enhancing Gemini's existing business in a number of key areas,' said Gemini president/CEO Michael O'Neal.
'In particular, the acquisition will establish Gemini as a global leader in its market, provide access to new customers to diversify our retail distribution and expand our product portfolio through the addition of new brands, categories and technologies.
'This will enhance our competitiveness and put us in a stronger position to serve the large, in many cases global, retailers that have emerged as the marketplace has consolidated,' said O'Neal.
Gemini, which acquired Zenith's accessories business in July of 2001, will create what it calls one of the largest manufacturers and distributors of consumer electronics accessories in the world, by adding to Recoton's brands its own Philips, Zenith, Magnavox, Southwestern Bell and For Dummies brands.
With its increased size and scale, Gemini said it will be positioned to serve the needs of the large national and international retail chains that comprise the largest and fastest growing channel for distribution of CE accessories.
'This acquisition is a significant next step in Gemini's long-term growth strategy,' continued O'Neal, who was named Gemini president/CEO in July of 2000. He had been chief operating officer. 'Over the past two years, we have leveraged Gemini's historic service strengths and introduced new merchandising strategies, brands and product offerings to expand our business base and increase revenue and profitability.
'We now look forward to serving the needs of Recoton's existing customers and to building on our momentum through a number of attractive growth opportunities, including further development of our premium cable and wireless business.'
Gemini, based here, is a privately held company founded in 1964. Known as a leading distributor of accessories products that connect and integrate CE and communications components and devices, the company sells over 1,800 products comprising a full assortment of CE accessories. These include headphones, antennas, A/V cables, surge protectors, telephone accessories and CD media products.
In support of the Recoton transaction and Gemini's growth plan, Gemini has raised new funding from Boston-based Parthenon Capital, a $1.1 billion private equity firm.
York Management Services, a private investment and management advisory services company, based in Somerset, N.J., acquired Gemini in June of 2000.
Recoton, which had been required by bankruptcy court to sell off its business properties and all related assets, will use the proceeds to reduce outstanding debt, which totaled about $235 million in long-term obligations last year.
Recoton, based in Lake Mary, Fla., and headed by chairman/CEO Robert Borchardt, also is a full-line accessories maker. The company traces its founding back some 65 years.