Audiovox Corporation has completed its acquisition of audio solutions group, Klipsch, for $166 million plus related fees and expenses, in what is expected to immediately increase cash flow and earnings per diluted share.
The acquisition, funded by an asset-based revolving credit facility led by Wells Fargo Capital Finance and existing Audiovox cash, is expected to generate approximately $170 million in net sales and $25 million in EBITDA in the 2012 fiscal year which runs from March 1, 2011 – Feb 28, 2012.
Revenue for the combined companies is expected to run at approximately $739 million, with market conditions and strategic initiatives contributing to positive growth.
Patrick Lavelle, President and CEO of Audiovox Corporation said: “We are very excited to close this acquisition because it not only adds world-class brands with strong distribution, both domestically and abroad, but it also gives us entry into the high-end installation market at both the residential and commercial level.
Klipsch brands are popular throughout the Middle East, the Americas, and the Asia-Pacific region, and holds the #1 position in the US. Lavelle said the company also plans to continue expansion into other key international markets.
He continued: “Klipsch R&D capabilities and its quality reputation are second to none, and we intend for that to continue as we welcome the Klipsch team to Audiovox.”
Fred Klipsch, Klipsch Group Chairman and CEO, said: “I too am excited about this acquisition and have no doubt that together we will successfully execute on our growth plans, expand our market positions in both our core areas and new markets, while never losing sight of the brand, the quality and our customers. Klipsch will always be dedicated to providing consumers with the best speaker solutions the industry has to offer, while supporting our worldwide customers at the very highest level. Our team is excited to become part of Audiovox and looks forward to the opportunities ahead.”
Klipsch is now a wholly owned subsidiary of Audiovox Corporation and will operate as a stand-alone entity, with the 65 year old company headquartered in Indianapolis and run by its current management team.