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Linear Combines Niles, Elan, Xantech Into Single Group

4/06/2010 02:01:37 PM Eastern
Carlsbad, Calif. - Nortek-owned Linear placed three of its residential-installation subsidiaries into a single group to increase collaboration and efficiencies, but "the companies will not merge, and they will still have a great deal of autonomy and differentiation," Linear chairman Grant Rummell told TWICE.

Mark Terry
Mark Terry
The as-yet-unnamed new audio, video, and control group consists of Niles Audio, Xantech and Elan Home Systems, including the Elan-marketed Aton, Sunfire and HomeLogic brands. Linear-owned brands not part of the new group include Gefen, Imerge, Omnimount, Panamax, SpeakerCraft and others.

The new business unit, based here, is led by president Mark Terry, a 17-year Harman International veteran who most recently was president of the Harman Pro Group. Reporting to Terry are Elan president/chief technology officer Bob Farinelli, Niles Audio president Frank Sterns and Xantech president Graham Hallett. Terry "comes to Linear with a proven track record of integrating business units without sacrificing brand autonomy," a Linear statement said.

 "I will give Mark a great deal of freedom" to implement ways to "improve collaboration and cooperation among the companies," Rummell said of the new group president, who is traveling outside the country. Such efficiencies could include more shared warehousing, collaborating on new-technology development, and coordinating trade-show exhibits so that each company accentuates a different area of expertise, but those decisions will be up to Terry, he said.

"When we bought companies, they tended to operate relatively independently," Rummell said of Linear's acquisitions of these and other companies. "That was the way we were making acquisitions at the time, and they were very different times. We tended to let them operate relatively independently, although there have always been some areas of combination."

In the housing market's current state, Linear needs to further increase collaboration among the three companies, he said, and that can't be accomplished without the hiring of "one person who is focused on making the companies more successful than in the past."

Although Linear "is not unhappy" with the three companies' financials, "there is an opportunity to do better," he said. Other Linear companies such as SpeakerCraft and Gefen "are doing a really good job, and there's no reason [to include them in the new group] for the sake of doing it."

In a written statement, Terry said he foresees "benefits that will inevitably come from greater collaboration between the brands." Each company, he said, "has a legacy of innovation and excellence that can be further strengthened by sharing resources, information, and ideas." The end result will be "a larger portfolio of clearly defined, integrated, and networked-based product offerings that bring meaningful innovation and value to our whole house automation, lighting, security and HVAC control customers."

Last December, Linear parent Nortek emerged from a prepackaged Chapter 11 bankruptcy. Nortek, through its various subsidiaries, is a global manufacturer of branded residential and commercial ventilation, HVAC, and home-technology convenience and security products.

For his part, SpeakerCraft CEO Jeremy Burkhardt told employees in an email that SpeakerCraft is "totally healthy and profitable" and that Linear's Rummell "has recognized this fact and has guaranteed that we will continue to operate autonomously." Burkhardt also said he is "confident our most recent efforts in both product development and business strategy have placed us in a very positive position in the marketplace. As we move through the rest of this year and into the future, I expect business to continue improving and our efforts will be rewarded with increased sales and a greater share of the market."
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