New York - A federal bankruptcy court approved Audiovox's bid to buy Recoton's audio businesses in the U.S. and Europe for $40 million plus the assumption of $5 million in debt.
Audiovox chairman John Shalam said the businesses will generate an additional $70-$100 million in annual revenue in the first year of ownership.
The acquisition will be Audiovox's second in little more than a year. In March 2002, the electronics supplier acquired car security supplier Code-Alarm.
The Recoton acquisition will enable the company to 'promote our consumer electronics and mobile products through the already established Recoton distribution network in Western Europe,' Shalam said in a prepared statement. In the U.S., said Audiovox Electronics president Pat Lavelle, the company will be able 'to expand marketing opportunities within existing 12-volt distribution channels' through Jensen's car audio business. Audiovox already markets mobile entertainment products under the Audiovox, Prestige, and Rampage brands.
Audiovox will also expand its penetration 'into the home by offering a complete line of Acoustic Research, Advent and Audiovox speaker and entertainment systems,' Lavelle said. The company's statement did not mention the future of Jensen-branded home speakers or whether the Jensen name would be extended to home systems.
Additional details about future positioning of the AR and Advent brands was unavailable.
The acquisition made sense, Shalam explained, because 'of the synergies that exist in our product lines, customer base and business practices.' In addition, the purchase 'will create minimal financial pressure on our operation since our cash position, combined with our credit facilities, will more than cover the transaction.'
Lavelle noted that the company expects 'to blend the Recoton brands into our electronics subsidiary with minimal overhead expense.'