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Gunning for the Custom Market: Is Audiovox the Next Nortek?

Acquisition of Klipsch marks Audiovox's first foray into higher-margin custom electronics, after a history of buying distressed accessories brands. Who might Audiovox acquire next?


Audiovox CEO Patrick Lavelle, Klipsch president Paul Jacobs, Audiovox founder and chairman John Shalam, at CES 2011 (click here to enlarge)
Julie Jacobson · January 14, 2011

Audiovox (Nasdaq: VOXX), a company best known for buying distressed brands in the accessories business, is straying from its roots with the planned acquisition of Klipsch Group Inc.

The company announced on January 6 that it had signed a non-binding term sheet to purchase all of the shares of Klipsch, subject to a number of contingencies.

It’s an unusual move for Audiovox, whose core business revolves around such technologically low-brow products as Terk antennas, Energizer batteries, Acoustic Research boom boxes, RCA gadgets, Code Alarm car security products and Surface Clean screen cleaners.

Klipsch is a whole different animal.

The company and its subsidiaries Jamo, Mirage and Energy enjoy a fairly strong reputation among mass-market retailers, custom electronics integrators and consumers for their wide range of audio products.

The brand is one of the most widely recognized in the consumer-grade computer-speaker category. Beyond that, however, Klipsch high-performance speakers consistently rank well in CE Pro’s annual brand report for the specialty A/V channel.

For example, in 2009, Klipsch ranked among the top five brands used by custom electronics professionals within the past two years in the following categories:

  • In-wall/in-celing speakers (third behind JBL, SpeakerCraft)
  • Floor/shelf speakers (first)

History Lesson: Nortek, Legrand, D&M, Duchossois
Assuming the Klipsch sale goes through, we should expect more of the same from Audiovox, possibly following in the path of Nortek, Legrand, Duchossois and D&M. All of those organizations have acquired custom electronics brands over the past decade, with mixed results. CE Pro offers a brief history of the mergers and acquisitions among these home technologies. Read History.

In both categories, Klipsch was named the most frequently used brand (tied with Proficient and JBL, respectively).

Jamo also placed respectably for floor-standing speakers used in the past two years by specialty A/V retailers and integrators.

During CES 2011, Audiovox president and CEO Patrick Lavelle told CE Pro, “It has always been our intention to invest in categories with stronger margins … and to expand distribution into commercial and CEDIA [custom installation] channels.”

It won’t be Audiovox’s first foray into high-performance audio, Lavelle notes. Audiovox German Holdings includes such brands as Magnat, Heco and Mac Audio.

But the planned acquisition of Klipsch is a big move for Audiovox in the U.S. Since 2000, when Audiovox “got serious in the acquisition mode,” according to its Web site, the company has acquired primarily distressed companies in the accessories business.


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  About the Author

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at julie.jacobson@emeraldexpo.com

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  Article Topics


News · Audiovox · D&M Holdings · Duchossois · Klipsch · Legrand · Linear · All Topics
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