EXCLUSIVE: Bowers & Wilkins Investor Files For Bankruptcy
Former Bowers & Wilkins investor Eva Automation has filed for bankruptcy after they walked away from their investment in the UK audio Company with little to show for their work in developing an audio network.
The Silicon Valley based Company has filed for involuntary and Chapter 7 bankruptcy protection despite the business being owned by Gideon Yu a billionaire director and a General Partner at Khosla Ventures a San Francisco based Company.
Yu acquired Bowers & Wilkins in 2016, hoping to use the well-known Hi Fi brand to develop an operating system for sound systems but this went pear shaped with his efforts sucking up capital.
In February 2020 Gideon Yu, who led the Eva Automation takeover, and Gregory Lee, who had been appointed CEO in 2019, exited the Company.
Lee was a former Samsung Vice President who appointed former Samsung Vice President Phil Newton to run the local operation.
Newton and his team are currently witnessing record growth in Australia as consumers invest in new sound system and a new generation of Bowers & Wilkins products including new speakers and soundbar.
As soon as Lee and Yu were out of the Company David Duggins was appointed as “sole Independent Director” of Bowers & Wilkins.
He is believed to currently be in discussions with several potential investors including, Sound United and Harman which is owned by Samsung.
Duggins has 25 years’ experience in the restructuring market, having previously held both formal insolvency and advisory roles.
He is working alongside Geoff Edwards, who has been Executive VP Operations at B&W for over 17 years.
Eva Automation is currently before the Northern District of California Court, they have chosen to represent themselves in court at this stage, it appears that they have not identified their assets or debts.
The filing did not identify who their largest creditor is however ChannelNews has been told that it is Bowers & Wilkins.
Gideon Yu who is on the board of Singapore based gaming Company Razer was the Chief Financial Officer of Facebook, where he led the $375 million investment round from Microsoft and Hong-Kong billionaire Li Ka Shing at a record $15 billion valuation.
Before that, Gideon was a Partner at Sequoia Capital, and was also the Chief Financial Officer at YouTube where he negotiated its $1.65 billion sale to Google amidst a highly competitive auction for the company.
Prior to YouTube, Gideon was the Treasurer and Senior Vice President of Finance for Yahoo, executing over 30 acquisitions / investments, including Shimon, Alibaba / Taobao, Overture, Haber, Inktomi, Flickr, and del.icio.us and over $5 billion of capital markets transactions.
Back in July Sound United, parent company to Denon, Polk Audio, Marantz, Definitive Technology, HEOS, Classé, and Boston Acoustics, issued a press statement claiming that they had entered into a preliminary letter of intent to acquire Bowers & Wilkins.
“Over the course of five decades Bowers & Wilkins built one of the most prestigious brands in the global speaker market with industry-leading acoustical engineering, iconic design, and marketing,” said Kevin Duffy, CEO at Sound United at the time.
No statement has been made since with some industry executives speculating that the deal with Sound United is currently on “hold”.
ChannelNews has been told proposed transaction remains subject to ongoing discussions, confirmatory diligence, regulatory approvals, and other required consents.
At the time Geoff Edwards, CEO of Bowers & Wilkins, confirmed in a separate statement that discussions between Bowers & Wilkins and Sound United were “at an early stage with a view to consolidating several premium brands into a new group offering even better consumer opportunities.”
“If our discussions are successful, combining Bowers & Wilkins’ engineering and manufacturing expertise in the premium category with the breadth of resources and capability of Sound United could certainly be a transformative step for both brands,” Edwards said. “It would allow the Bowers & Wilkins team even greater opportunities to focus on what we do best – building the industry’s finest loudspeakers.”
Should the two brands decide to move forward, Sound United would acquire all worldwide third-party distribution and licensing agreements under which Bowers & Wilkins premium audio products are currently sold. This does not affect any of the existing Bowers & Wilkins product portfolio or any of the products Bowers & Wilkins currently distributes or current global operations.
Sound United is a portfolio company of Boston-based private equity firm Charlesbank Capital Partners, LLC.