Wadia Sees Hales Acquisition As Promoting Hearty Growth Acquisition As Promoting

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Wadia's purchase of speaker maker Hales Design Group is a central element in the electronics manufacturer's "fairly aggressive growth plans," said Wadia sales and marketing VP Michael Demeyer.

As part of that plan, Wadia will retain the Hales brand because of its "established good equity" and the reputation of Hales founder and designer L. Paul Hales, who stays on to guide loudspeaker product development, Demeyer said.

The acquisition will enable Wadia to expand its product range beyond high-end digital audio electronics and amplification, and tap into a speaker market that Demeyer called growing, while enabling Hales to participate in growing speaker segments such as powered towers and powered subwoofers.

Also, he said, the combined companies see potential for speakers incorporating digital electronics crossovers and other digital signal processing technologies.

Demeyer said that Wadia expects to use the combined strength of the two brands and its more aggressive product-development plans to develop an expanded base of specialty dealers and custom installers. Wadia has about 60 accounts, and Hales has about 45.

Initially, he said, Wadia will concentrate on consolidating sales and marketing organizations, then "over the next 12 months, we'll begin to align sales and marketing programs where appropriate." For the first few months, "there will be no significant changes to dealers programs such as discount structures and incentive programs."

Eventually, the company will develop incentives for dealers to carry both lines without requiring it. About 25% of both brands' dealers currently overlap.

Wadia recently entered the amplification market with a $72,000 two-channel D/A converter with enough voltage output to drive speakers directly, Demeyer said, and that technology will be introduced "more broadly" into the company's selection.

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