D&M Agrees to Acquisition Bid by Bain Capital

D&M Holdings, owners of Denon, Marantz, Boston Acoustics, Escient and MacIntosh, has agreed to be acquired by Bain Capital Partners. The tender offer for all shares of D&M Holdings is 510 yen ($4.74) per share of common stock.

In a statement released Friday, D&M wrote that the agreed upon tender price represents “a premium of 37.1 percent over the average closing share price in the six months prior to June 19, 2008, and a premium of 68.9 percent over the unaffected closing share price on January 23, 2008, the day prior to the emergence of press speculation regarding a potential transaction …”

Bain Capital is a global private investment firm headquartered in Boston, with offices in Tokyo, Hong Kong, Shanghai, New York, London, and Munich.

Reuters reported that Bain’s bid is in conjunction with audio manufacturer Kenwood Corp and that Kenwood is in the process of teaming with Victor Company of Japan Ltd (JVC).

A subsequent report by Bloomberg cited the Nikkei newspaper’s claim that Kenwood plans to invest up to 1 billion yen ($9.3 million) to buy shares from Bain.

The report added that the alliance would center on mobile electronics. A Kenwood company spokesman, however, told Bloomberg that the decision to invest in D&M has not been made. Bain addressed the speculation by issuing a statement that "Kenwood is not an investor in the proposed transaction, and there are no discussions or plans regarding a future alliance with D&M at this time."


D&M chairman and CEO Eric C. Evans says the move is in the best interest of its stockholders. He adds that, as a privately held company, it will be more able to adapt to evolving consumer technology demands.

“We will have more latitude to invest for medium- and long-term growth,” he says.

Through a series of acquisitions of its own, D&M has experienced its share of growth over the past six years.

It says it will continue its pursuit of acquisitions and growth in the consumer, commercial and automotive audio video business.

The tender offer by Bain Capital is scheduled to be launched following the signing of the tender offer agreement. Bain Capital intends to purchase 100 percent of the shares of D&M Holdings.

Any remaining outstanding shares would be obtained through the subsequent stages of the acquisition process. The entire process is subject to various legal conditions and clearances.

D&M’s Board of Directors will formally consider a resolution to recommend the tender offer to shareholders at the time the offer is officially launched.

Bain Capital also entered an agreement with RHJ International, S.A. (RHJI), D&M's largest shareholder, under which RHJI will tender all its shares (45,323,160 shares or approximately 48.5 percent of fully diluted shares outstanding) of D&M Holdings to Bain Capital.

Morgan Stanley Japan Securities Co., Ltd. is acting as financial advisor to D&M Holdings in this transaction.

UPDATE: Information about the Reuters and Bloomberg reports were added to this story on June 23.