Amsterdam, The Netherlands — Royal Philips Electronics closed the sale of its OEM autosound business to D&M Holdings.
The cash transaction represents the seventh acquisition by D&M since the company was formed in 2002. Philips’s 2005 OEM volume was about $158 million compared with D&M’s 2005 annual revenue of about $800 million. Philips has been divesting non-core businesses. Neither company disclosed the transaction price.
Kawasaki, Japan-based D&M previously said it will leverage its purchase of Philips Sound Solutions (PSS) to put the Denon, Marantz, McIntosh and Snell brands on automaker sound systems and to expand the Boston Acoustics brand in the OEM autosound market. D&M will also continue to make and market Philips’s unbranded OEM autosound equipment, which is currently sold to BMW, Volkswagen, Toyota (Europe), Seat and Jaguar.
Other key OEM customers include Philips, Dell and Nokia, and with the acquisition, D&M gets these customers as well as PSS intellectual property. That property includes DSP amplifiers, lightweight and high-power cone speakers, flat speakers and assemblies used in flat displays and televisions, and wireless surround speaker systems. The purchase also brings development centers in Belgium, China and India and production facilities in Belgium, Hungary, Ukraine and China.
With PSS’ sale, Philips gets a one-time earnings gain of $55 million for the fourth quarter of 2006.