Headset maker Plantronics has signed a definitive agreement to acquire Altec Lansing Technologies, maker of high-end portable and powered audio systems.
Under terms of the agreement, Plantronics will acquire all of the capital stock of Altec Lansing for a cash purchase price of about $166 million. Following the close of the transaction, Milford, Pa.-based Altec Lansing will retain its name and become a wholly-owned subsidiary of Plantronics, which is a publicly traded company.
Gary Savadove, former GE consumer electronics exec and CEO of Labtec, who joined Plantronics six months ago, will remain president/CEO of the Plantronics audio entertainment business group, which will now incorporate Altec Lansing.
Bob Garthwaite, who has served as marketing and sales senior VP for Altec Lansing, will become president and CEO of Altec after the agreement closes.
Altec Lansing, which did more than $100 million in revenue in 2004, brings to the deal a range of products and an established market presence in portable and powered audio. These include its inMotion iPod portable speaker systems, a wide range of computer and home entertainment sound systems and a line of headphones and headsets. Altec is privately held.
“The combination of our expertise in voice communication and Altec Lansing’s in music entertainment enables us to meet the full audio needs of the consumer, in their personal and professional lives” said Ken Kannappan, Plantronics president/CEO.
“We’ve been exploring audio entertainment possibilities for some time, and the acquisition of Altec Lansing, with its product portfolio strength and brand reputation, dramatically accelerates those plans at a time when the technology and momentum in convergence is there for us to leverage,” said Kannappan.
Looking at the two companies, both of which go back 40 years or more, Garthwaite said, “Between us, we understand the technical needs of the professional market and the lifestyle demands of the consumer market. And when you look at the growth potential for devices like music-enabled handsets and cellular music decks, the synergies and opportunities become crystal clear.”
“Both companies were moving toward the immense opportunity for long-cycle growth and innovation created by the unison of digital voice and music technology,” continued Kannappan. “Together we’re much stronger and better positioned to achieve this vision.”
Excluding non-cash acquisition-related and amortization charges, the acquisition will be accretive to Plantronics earnings in fiscal 2006. Including non-cash acquisition-related and amortization charges, interest expense and lost interest income, Plantronics does not expect the transaction to be significantly dilutive or accretive to its earnings per share for fiscal 2006, as a whole.
