With Klipsch Deal, Audiovox To Be Major Speaker Player

By Joseph Palenchar On Feb 21 2011 - 6:01am

PORT WASHINGTON, N.Y. – When Audiovox closes its definitive agreement to buy the Klipsch Group for $166 million, it will become a major player in the home speaker market, NPD statistics show.

In 2010, NPD found that Klipsch-branded speakers ranked second in unit-volume share at retail behind Polk and tied with Polk for first place in dollar share.

The statistics don’t include Klipsch Group’s other speaker brands — Jamo, Mirage, and Energy — whose sales would boost total Klipsch share.

Klipsch bought Denmark-based Jamo, an electronics/speaker company, in 2005, and the following year purchased Audio Products International, the Canadian company known for the Mirage and Energy speaker brands.

The deal is expected to close by the first week of March.

Klipsch will become a wholly owned subsidiary of Audiovox, will be run as a stand-alone operation in Indianapolis, and will continue to be led by Klipsch’s current management team, Audiovox said.

Though Klipsch will operate as a atdand- alone company, said Audiovox president/ CEO Pat Lavelle, “we see many opportunities to leverage distribution, global brand development, and brand expansion in areas such as OEM automotive and professional audio.”

Klipsch also “provides an outstanding new distribution channel for our company to reach the home and commercial installation markets,” Lavelle said.

Audiovox expects to finance the acquisition with a combination of existing Audiovox cash and a new asset-based revolving credit facility that will also be used for operating capital. Once the deal closes, Audiovox expects to have money left over under the credit facility for general corporate purposes.

On a pro-forma basis, for the 12 months ended Nov. 30, 2010, the combined companies’ revenues were about $742.2 million compared with $573.1 million for Audiovox, Audiovox said.

Lavelle called Klipsch Group “the preeminent audio brand for residential, professional and personal listening use.” He said the company has “a strong and stable base of retail, e-commerce, commercial distribution and professional installation business partners in North America, Europe and around the world.”