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Audiovox To Buy RCA A/V Business

Audiovox has signed a definitive agreement to purchase Thomson’s RCA-brand A/V business outside Europe and the worldwide rights to the RCA brand on A/V products, excluding TVs and home phones.

The agreement follows Audiovox’s January acquisition of Thomson’s accessories business outside Europe for about $59 million. That deal included the RCA brand and other brands.

With the latest announcement, Thomson will remain only in the home phone business in the U.S. consumer electronics market, where it markets GE-brand consumer phones and RCA-brand SO/HO and small-business phones. In 2004, Thomson sold the rights to the RCA brand on TVs to China’s TCL, although it retains a minority stake in RCA-TV marketer TTE (Thomson-TCL Electronics).

Audiovox, which expects the transaction to close by Dec. 31, will pay $19.7 million plus an undisclosed payment to buy RCA’s A/V inventory. Audiovox will also pay a fee to Thomson for five years based on the RCA brand’s sales performance, a spokesman said. Audiovox declined to comment on whether RCA’s Indianapolis operations will be moved to Hauppauge, but in a prepared statement, Audiovox president/CEO Pat Lavelle said the “acquisition is in line with our announced M&A strategy of adding synergistic businesses to our core and leveraging existing overhead to assimilate them while adding minimal additional operational expenses.” Based on the success of the RCA accessories brand since that acquisition, Lavelle told TWICE, the company saw great opportunity in further consolidating the brand. Audiovox recently reported a profitable fiscal second quarter, driven primarily by strong accessories sales.

The RCA A/V business generates about $150 million in annual sales, and Audiovox said it will be able to generate additional income from licensing the RCA name. Rights to the RCA name will apply to such products as DVD players, CD players, GPS, portable DVD, DVD recorders, HD-DVD and Blu-ray players, digital cameras, camcorders “and other A/V” products, a spokesman said. Currently RCA markets such A/V products in the U.S. as mini systems, HTiBs, MP3 players, digital camcorders, DVD players, and kitchen electronics.

The deal is the latest in a series of brand acquisitions by Audiovox. Since 2002, the company has acquired Code-Alarm, Recoton’s electronics and accessories businesses, which included the Jensen, Acoustic Research, Advent, Phase Linear, Road Gear, Discwasher, Ambicom, Spikemaster and Recoton brands; Terk, Thomson’s accessories brands, and Oehlbach of Germany.

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