Automotive component Company Gentex Corporation, is tipped to go ahead with the acquisition of The Premium Audio Company and Vox International, the big question is what will they do with the audio side of the acquisition and brands such as Klipsch, Onkyo and Integra and will the loss pf PAC’s biggest customer in the USA play a part in what they do going forward.
Recently Gentex announced their financial results for their fourth quarter, but they were not good despite earlier forecasts that the Company was in growth mode.
The results spooked investors with investors now questioning the Vox International acquisition following a decision by buying group ProSource, which was Premium Audio Company’s biggest customer in the USA to dump PAC’s products from their ranging, the big winner is Masimo and their Marantz and Denon products.
ProSource CEO Jim Pearse notified members of the largest dealer buying groups that is similar to NARTA in Australia late last week.
Pearse’s email to members claimed that in the past “Premium Audio Company has been a steadfast supporter of ProSource for over 35 years and has become an integral part of our family,” Pearse said. The ProSource CEO even adds this sentiment to his note,” We wish them all the best and continued success.”
ProSource is widely considered to be one of PAC’s largest customers, if not the largest customer claim observers.
Pearse said “To facilitate this transition, we have collaborated with our ProSource vendors to develop programs that will support our membership. I am grateful for the support from Masimo, Harman, Yamaha, Sony, and Lenbrook in creating initiatives to drive increased business and profitability. I am confident that this transition will yield positive outcomes for ProSource and our members”.
Some claim that this development couldn’t come at a worse time for PAC and its parent company Voxx which is in the final stages of the Companies acquisition by Gentex.
In late January, Voxx notified the SEC that its normally required regulatory filings would be delayed, telling the Commission, “…the Company has determined that it is necessary to test its goodwill, other intangible assets, and other long-lived assets for impairment.”
So, what does this mean.
Testing “goodwill, and other intangible assets, and other long-lived assets” is a process to determine the proper value of both the assets and the overall Company as they often make up a significant portion of a Company’s value.
In the case of Gentex the Company was initially interested in the automotive assets of Vox International with speculation now emerging that the audio side of the business could either be sold or even closed down.
There is even speculation that the deal may be abandoned all together due to a collapse in the EV market with automotive manufacturers rethinking their go to market strategies due to falling sales of EV vehicles.
This notice to the US stock Exchange came after both parties had already agreed to merger and had already agreed a price.
The loss of Premium Audio Companies biggest customer could be a deciding factor for Gentex especially as no decision has been made on the future of Masimo Consumer and there is little interest in the acquisition of audio brands in the market.
