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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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