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Audiovox announces definitive agreement to acquire klipsch(14/2/2011) by efwegbe erergeer
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Audiovox announces definitive agreement to acquire klipsch(14/2/2011) |
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Business,Business News,Business Opportunities
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News Audiovox Announces Definitive Agreement to Acquire Klipsch(14/2/2011) Purchase signals Company's entrance into high-end performancespeakers to both retail and commercial channels Audiovox Corporation (Nasdaq: VOXX), announced today that it hasentered into a definitive agreement to acquire Klipsch Group Inc.and its worldwide subsidiaries ("Klipsch") for totalconsideration of $166 million, subject to certain contingencies andadjustments, plus related transaction fees and expenses. Klipsch,headquartered in Indianapolis, is a global leader in providinghigh-performance audio solutions serving the residential,professional and personal listening markets. Klipsch Groupproducts are sold through premier retail, online, and distributionchannels around the world. The acquisition is expected to be financed by a combination ofexisting Audiovox cash and a new asset-based revolving creditfacility from Wells Fargo Capital Finance, LLC that will also beused for operating capital.
The combined assets of Audiovox andKlipsch will secure the borrowings under the financing commitmentsand the Company expects the transaction to close within 30 days. Subsequent to the close of the transaction, Audiovox expects tohave excess availability under the credit facility for generalcorporate purposes. However, there is no assurance at this timethat this transaction will be completed. This transaction is expected to be accretive to cash flow andearnings per diluted share ("EPS") in fiscal 2012inclusive of all costs for financing.
The Company noted that on apro-forma basis, for the latest twelve months ended November 30,2010, revenue for the combined companies approximates $742.2million compared to $573.1 million for Audiovox as a stand-alonecompany. Patrick Lavelle, President and CEO of Audiovox Corporation stated,"This transaction will add the world renowned Klipsch Groupbrands- Klipsch, Jamo, Energy and Mirage- and its world classmanagement team- to the growing Audiovox family of companies. Thishighly respected company has for over 60 years been synonymous withpremium high-end audio solutions, and today enjoys thewell-deserved reputation as 'The' preeminent audio brand forresidential, professional and personal listening use. They have astrong and stable base of retail, e-commerce, commercialdistribution, and professional installation business partners inNorth America, Europe and around the world. Klipsch Group providesan outstanding new distribution channel for our company to reachthe home and commercial installation markets." Klipsch will become a wholly-owned subsidiary of Audiovox and willbe run as a stand-alone operation in Indianapolis, and willcontinue under the leadership of the current management team.
Weare highly confident that this acquisition will result in both nearand long term value growth for our shareholders and enhance ourposition in the premium audio category for years to come. Fred Klipsch, Chairman and CEO of Klipsch Group, Inc. stated,"Our team looks forward to partnering with Audiovox and withthe additional resources Audiovox has to offer accelerating ourdomestic and global growth. Klipsch remains focused on providingour customers with the best speaker solutions in the industry,maintaining our deep customer and supplier relationships andleveraging our world class employee base.
Klipsch Group willcontinue to be 'The' innovative premium speaker provider ourpartners expect and trust." Lavelle added, "While Klipsch will operate as a stand-alonecompany, we see many opportunities to leverage distribution, globalbrand development, and brand expansion in areas such as OEMautomotive and professional audio." Wells Fargo Securities,LLC acted as exclusive financial advisor to the Company and WellsFargo Capital Finance, LLC provided the committed debt financing. Houlihan Lokey Howard & Zukin acted as financial advisors tothe Klipsch Group and Vantage Point Venture Partners. Barnes &Thornburg LLP served as legal counsel for Klipsch Group. DuaneMorris LLP assisted as legal counsel for Audiovox Corp.
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