Russound to Acquire Colorado vNet

Russound and Colorado vNet have signed a definitive letter of intent (LOI) agreement under which Russound will acquire the assets of privately-held Colorado vNet.

Terms of the transaction between the two companies were not disclosed. The LOI states that the deal will be done by October 31, 2009.

The Colorado vNet brand name will remain intact, and the company will continue to operate out of offices in Loveland, Colo. Russound is based in Newmarket, N.H.

Russound CEO Charlie Porritt says the acquisition fits perfectly into the company’s product roadmap of pursuing technologies that ease the transition from analog to IP-based solutions. He called the move into home controls “a natural progression for Russound.”

“One of Russound’s goals has been to offer control solutions for security, lighting and thermostats," says Porritt. "This acquisition immediately gives us access to offering home control through a company that we will own and control, and the ability to merge some of that control technology into Russound products." He added that Russound has tried to enter the control market in the past through partnerships.

Colorado vNet announced on Sept. 22, 2009 that a would-be investor fell through, forcing the company to close its doors. Just days after the shut-down was announced, Mike Malone, Colorado vNet's VP of sales, sent an e-mail to dealers that said the company had received "several commitments to invest in the recovery of the business," and that vNet could have a resolution by the end of September. Speculation then went rampant on who the frontrunner was to acquire Colorado vNet.

The acquisition provides Russound with several key assets from Colorado vNet, including:

Technology: Colorado vNet has 29 different patents granted or applied for, according to Porritt. He says the company will be reviewing individual product SKUs from vNet but initially has no announcements of any discontinued lines.

Personnel: No specific decisions have been made on individual personnel, including Colorado vNet CEO Bill Beierwaltes. Porritt says certain key personnel will be retained.

Dealer Base: Colorado vNet reportedly has 950 direct dealers, of which only about 200 overlap with current Russound dealers.

“Our biggest priority is to take care of the Colorado vNet dealers,” says Porritt. “Colorado vNet will operate independently to preserve its dealer base and will revert to courtesy technical support services for authorized Colorado vNet dealers effective Wednesday October 7th.”

“Of all the companies that expressed interest in acquiring our assets, we believe that Russound makes the most sense for our customers, our employees and our business," says Beierwaltes. "Russound’s long history of innovation, commitment to customer service and overall leadership role in the multi-room distribution market leaves me confident that Colorado vNet is in good hands.”