It seems that the consolidation of consumer audio brands is in full swing. Just last month (November 2024) Bose announced they were acquiring the McIntosh Group, which includes McIntosh Labs and Sonus faber. And today we learned that Gentex Corporation in acquiring VOXX International for $7.50 a share, which represents an aggregate enterprise value of approximately $196 million.
The sale is subject to approval of VOXX International’s shareholders, along with regulatory approvals and is expected to close in the first quarter of 2025.
Who is Gentex?
Gentex Corporation was founded in 1974 as a supplier of automatic-dimming rearview mirrors and electronics to the automotive industry, dimmable aircraft windows for aviation markets, and fire protection products to the fire protection market.
Who is VOXX International?
VOXX International is a worldwide leader in the Automotive Electronics and Consumer Electronics industries. VOXX has built market-leading positions in in-vehicle entertainment and automotive security, as well as in a number of premium audio market segments. In 2020, VOXX formed a subsidiary called Premium Audio Company that included Klipsch, Jamo, Mirage, ProMedia, Magnat, Heco, Mac Audio, Onkyo, Pioneer, Pioneer Elite, Integra, Teac, and Esoteric. However, not all those brands are active today.
Why this purchase?
Gentex believes the acquisition of VOXX is a strategic addition to its portfolio of products that will contribute to long-term growth and profitability, that creates shareholder value through increased revenue in existing and new markets.
Gentex also believes its expertise in high volume manufacturing will help Premium Audio Company brands expand into the connected home space, through newly launched Gentex products, such as Place™, and HomeLink Smart Home Solutions™.
In addition, Gentex aims to leverage VOXX’s automotive OEM and aftermarket business and build on the early success Klipsch Reference Premiere car audio systems.
As a result of the VOXX acquisition, Gentex projects its annual revenue to increase to as much as $400 million per year.
What’s next?
Gentex is expected to review each business unit for strategic fit. This means the some brands will get a boost, but others may be eliminated or sold yet again. This process is expected to take 18 to 24 months. That calls into question the future of the two most well known brands in the portfolio — Klipsch and Onkyo. Even if one or both brands survive, the future for the remaining brands doesn’t look promising.
Related stories:
- VOXX International Acquires Onkyo for $30.8 million (June 2021)
- Onkyo Files For Bankruptcy (May 2022)
- The Rebirth of Mirage Loudspeakers? (January 2023)
Press release stated below:
Transaction Implies 163% Premium Over the Unaffected Stock Price Prior to the August 27, 2024 Announcement that the Board was exploring Strategic Alternatives
ORLANDO, Fla., Dec. 18, 2024 /PRNewswire/ — VOXX International Corporation (NASDAQ: VOXX) (“VOXX” or the “Company”), a leading manufacturer and distributor of automotive and consumer technologies for the global markets, as well as strategic joint ventures including biometrics, today announced that VOXX and Gentex Corporation (NASDAQ: GNTX) (“Gentex”) have entered into a definitive agreement and plan of merger (“Merger Agreement”) for Gentex to acquire VOXX in an all-cash transaction. Under the terms of the Merger Agreement, Gentex will acquire all of the issued and outstanding shares of VOXX common stock not already owned by Gentex for $7.50 per share, representing an aggregate enterprise value of approximately $196 million.
The $7.50 per share merger consideration represents a premium of approximately 163% to the Company’s unaffected closing Class A common stock price of $2.85 on August 26, 2024, the last trading day before VOXX publicly announced that its Board of Directors was conducting an exploration of strategic alternatives in an effort to maximize stockholder value, as well as the public disclosure that Gentex had made an unsolicited proposal to acquire VOXX at $5.50 per share. After several months of a robust sales process led by a transaction committee of directors unaffiliated with Gentex, working with the committee’s independent financial advisor, Solomon Partners, and meeting with an extensive field of prospective purchasers, both strategic and financial, the transaction was approved unanimously by the Company’s transaction committee and by the disinterested members of its Board of Directors.
Ari Shalam, Chairman of the board of directors of VOXX, stated “the transaction with Gentex ensures a seamless transition for our brands, employees, customers and partners. After a thorough and exhaustive sales process, the disinterested members of the board, the transaction committee and I unanimously support this decision, believing that it represents the best and most reliable path forward to maximize value for all VOXX stockholders. My father, John Shalam, who founded VOXX 60 years ago, and I are incredibly proud of the legacy we have built and the remarkable accomplishments of the VOXX team. We are confident that under Gentex’s stewardship, VOXX’s legacy will continue to thrive for the benefit of our stakeholders.”
Simultaneously with the execution of the merger agreement, John and Ari Shalam, along with certain family members, entered into a voting agreement pursuant to which they agreed to vote their shares of common stock in favor of the proposed merger, with such voting obligation terminating should the Merger Agreement be validly terminated or the Board of Directors or transaction committee making a recommendation adverse to the Merger Agreement and the merger. The Shalam family beneficially own 1,935,898 shares of Class A common stock and 2,260,954 shares of Class B common stock, representing approximately 57% of the outstanding voting power of the Company’s common stock. The Shalam family will receive the same $7.50 per share merger consideration for their shares of Class A and Class B common stock as other VOXX stockholders, demonstrating their full alignment with other VOXX stockholders.
The proposed transaction, which was approved by VOXX’s Board of Directors, acting on the unanimous recommendation of a transaction committee of the Board of Directors comprised entirely of directors unaffiliated with Gentex, is expected to close during the first quarter of calendar year 2025. The proposed transaction is subject to stockholder approval, receipt of anti-trust regulatory approvals and other customary closing conditions.
Advisors
Solomon Partners is serving as financial advisor to the Transaction Committee of the Board of Directors of VOXX, and Bryan Cave Leighton Paisner LLP is serving as its legal counsel. Stopol & Camelo, LLP acted as legal counsel to VOXX. Jones Day is serving as legal counsel and Acropolis Advisors are serving as financial advisor to Gentex and its Board of Directors.
About VOXX
VOXX International (NASDAQ: VOXX) has grown into a worldwide leader in the Automotive Electronics and Consumer Electronics industries. Over the past several decades, VOXX has built market-leading positions in in-vehicle entertainment and automotive security, as well as in a number of premium audio market segments, and more. VOXX is a global company, with an extensive distribution network that includes power retailers, mass merchandisers, 12-volt specialists and many of the world’s leading automotive manufacturers. For additional information, please visit our website at www.voxxintl.com.
About Gentex
Founded in 1974, Gentex Corporation is a leading supplier of digital vision, connected car, dimmable glass and fire protection technologies. For additional information, visit Gentex’s web site at www.gentex.com.
[Source: PR Newswire]
