BREAKING NEWS
Will High-End Classé Represent Sound United’s Crown Jewel?
Just when you thought it was all over, Strata-gee has learned that a new suitor – Vista, CA-based Sound United – has emerged to make a bid to acquire Classé Audio from current owner B&W Group. Classé was shut down by B&W on October 6th, as we reported at the time. However, because the company was still sitting on a relatively significant level of inventory – and was considering producing an additional small run of certain models to balance out their inventory to facilitate liquidation – B&W executives often maintained it was still in business.
When deals with three previously interested parties failed to come to fruition, B&W made the decision to close Classé’s Montreal headquarters, dismiss all Classé staff, and turned over service and support functions to B&W facilities.
See more on this surprising development for Classé…
We have heard much angst from many Classé dealers over the last few months that this matter has been transpiring, many feeling the pain of B&W’s decision to phase the brand out – a highly regarded brand that many of them have sold for years. The news of B&W’s decision to shut the brand down caused something of a panic, as many dealers were still spec’ing Classé products in installation proposals.
Many dealers hopes were raised when rumors emerged that one or more suitors had approached B&W about potentially buying the brand. We eventually confirmed that there were three potential buyers, each with different degrees of conviction to effect a purchase. However, ultimately, all three of them fell by the wayside for one reason or another – and the shutdown of Classé began to appear to be permanent.
Enter Sound United
Now we have confirmed the entrance of Sound United, a division of DEI Holdings and essentially a holding company that fields largely mid-fi brands such as Polk Audio, Definitive Technology, and – as of earlier this year when they acquired D+M Group – Boston Acoustics, Denon, HEOS by Denon, and Marantz. Sound United, we are told, is in the process of acquiring Classé to fill out their portfolio of audio brands by expanding into the luxury, high end market.
While we havent heard details on Sound United’s plan for the brand, it is easy to see the company is heavily weighted with mid-line brands and could potentially benefit with a well-respected, high end audio brand such as Classé. Such an addition could help bolster their credibility as sound quality and technology experts – as well as provide a positive high-end blush on the company overall.
Much Like McIntosh at D+M Group
This is essentially the position that D+M Group (D&M Holdings) placed their McIntosh brand before they ultimately sold it off years later. Although in reality, the high-performance, high-end market is distinctly different than the mainstream…its owner can benefit from a positive boost to their image and an improved market position…sort of a trickle down effect.
We have reason to believe that this effort by Sound United is a serious one. First of all, Sound United’s parent DEI Holdings is owned by Charlesbank Capital Partners – a well-known private equity company that gives the company buying clout…something they demonstrated earlier this year when they purchased D+M Group in March from Bain Capital. There’s no question in our mind that Sound United has the buying power to conclude this transaction if they so desire.
Strategy Appears to be in Play Here
Secondly, it is clear to us that Sound United is engaging in some serious strategic planning. Clearly, they determined they needed to branch out from simply offering loudspeaker brands by getting into the electronics side of the business, hence, the March acquisition. We’re not suggesting we agree with their strategy, or endorse their strategy…simply we are saying that we can see a strategic underpinning to their moves. And we see it again with this move to pursue a prestige, high-performance, high-end brand like Classé to – pardon the pun – add some class to their portfolio.
In any event, should the deal be successfully concluded, Classé dealers can heave a sigh of relief as their favorite brand gets a new lease on life. And the specialty industry segment pushes back from another painful example of contraction.
We reached out to Sound United for comment on this story but they did not get back to us by the time this post was published.
Learn more about Sound United by visiting their website: www.soundunited.com.
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