D&M Purchase Sets Sights On OEM Autosound Market

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Kawasaki, Japan — D&M will use its planned purchase of Philips’ OEM autosound business to put the Denon, Marantz, McIntosh and Snell brands into automaker sound systems and to expand the Boston Acoustics brand in the OEM autosound market, the company told TWICE.

D&M “plans to significantly expand its branded audio business by leveraging the Philips Sound Solutions (PSS) OEM relationships and operations,” a spokeswoman said. “That means it wants to take the Denon, McIntosh, Marantz and Snell brands and team up with automakers to use those brands in autos in addition to taking the Boston Acoustics brand to more companies.”

D&M will also continue to make and market PSS’s “unbranded but high-quality” OEM autosound equipment, which is currently sold to BMW, Volkswagen, Toyota (Europe), Seat and Jaguar. Nonetheless, “more consumers are looking for high-quality, premium audio when they buy a vehicle, so the possibilities are great for D&M’s expansion into this business,” she added.

The cash transaction, expected to close by the end of the year, will represent D&M Holdings’ seventh acquisition since the company was formed in 2002. PSS’s volume is about $150 million compared with D&M’s 2005 annual revenue of about $800 million. Philips has been divesting non-core businesses.

Other key PSS 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, plus wireless surround speaker systems. The purchase also brings development centers in Belgium, China and India and production facilities in Belgium, Hungary, Ukraine and China.

“This acquisition allows us to achieve critical mass in revenue, infrastructure and relationships in the automotive OEM business and substantially enhances our ability to develop innovative and groundbreaking premium products,” added Eric C. Evans, chairman and co-chief executive officer of D&M Holdings.

In a related matter, D&M said Boston Acoustics received its first OEM autosound contract from General Motors, which hasn’t identified the specific vehicle that will get a Boston-branded system. All of the current Boston business is with DaimlerChrysler, which uses the brand in 10 vehicles, including the Chrysler 300 series, Dodge Magnum, Dodge Charger, Jeep Grand Cherokee and Jeep Compass.

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