Sound United Announces Acquisition of Classé Audio
Sound United LLC, parent company of Denon, Marantz, Polk Audio, Definitive Technology, Polk BOOM, HEOS, and Boston Acoustics announced, on the eve of the CES 2018 show, its acquisition of Classé Audio, a leading manufacturer of high-performance music and home theater components who were previously owned by Bower & Wilkins.
A Little Historical Background
The D+M Group, formerly known as DM Global and D&M Holdings, is a Japanese corporation that owned several audio and video brands. It was formed in 2002 from the merger of Denon and Marantz. In August 2005, the group purchased Boston Acoustics and in February 2017, the D&M group was acquired by Sound United LLC, a subsidiary of DEI Holdings.
Definitive Technology and Polk Audio were acquired in 2004 and 2006 respectively by Directed Electronics, a subsidiary of DEI Holdings.
DEI Holdings, Inc. is headquartered in Southern California, was founded in 1982, and acquired by Charlesbank Capital Partners in 2011. DEI Holdings Inc. is organized into two divisions, Sound United (audio) and Directed (vehicle security). Sound United LLC is now the parent company to Denon, Marantz, Polk Audio, Definitive Technology, Polk BOOM, HEOS by Denon, Boston Acoustics and Classé Audio.
Charlesbank Capital Partners, is a middle-market private equity investment firm based in Boston and New York who focus on management-led buyouts and growth capital financings.
So now one financial investment house owns, or has significant investment in, many of the world’s best and most respected audio manufacturers!
My 2 Cents
Audio companies continue to get ‘gobbled’ up under the premise that putting them all under one roof will provide better products and service. I’m not too sure. Generally, based on my experience, and having been through several such mergers and acquisitions, the only benefits to doing this is that the parent financial holding company increases its bottom line to enrich its partners and shareholders. Ultimately, they have a gaggle of companies, that they can resell at the appropriate moment, when they can’t squeeze more profit out of their stable.
I am sure that sharing development costs and ideas between companies ultimately cuts costs, helping the bottom line, and can provide more innovative products by sharing ideas and research, but that often means a reduction in staffing. Been there, done that!
As an example, take the latest Denon and Marantz 13.2 products. One quick glance and you can see that the main DSP and wireless boards look identical, with probably even more shared developments ‘under the hood’. Both support 32 bit processing and use the same 32 bit DAC’s, so is there a significant difference in sound quality between them? Digital signal processing, ADC, DAC are what often determines the final audible results. I doubt that each company developed all its own unique DSP algorithms for the same hardware. The amount of analog processing in receivers mainly being limited to line amplifier I/O, power amps and, of course, power supplies. All the designs of which, over the years, have been fairly finely tuned by these audio companies. A different GUI, user features, remote and box doesn’t make for a better sounding product.
I suppose Marantz fanatics only buy Marantz and Denon fan boys, like myself, only buy Denon, despite the underlying core hardware probably being identical. Its all about choice and brand loyalty, each of us paying a premium price for that privilege.
Are we heading into a range of hardware that is basically all the same stuff? Just re-badged? I hope not.
I can only hope that these company purchases, and investments, prevent them all from going out of business. Providing them with financial investment to keep them afloat through hard times, and continue to develop more outstanding audio products.
I know, it’s a cynical view!
