Plantronics to Acquire Altec Lansing
Jul 13, 2005 11:43 AM
Plantronics Inc. (NYSE: PLT) announced it has signed a definitive agreement to acquire Altec Lansing Technologies Inc., a market leader in portable and powered audio systems. The agreement will unite two leading audio brands with rich heritages and complementary strengths.
Under the terms of the agreement, Plantronics will acquire all of the capital stock of Altec Lansing for a cash purchase price in total of approximately $166 million. Following the close of the transaction, the resulting wholly owned subsidiary of Plantronics will be called Altec Lansing Technologies Inc.
“The combination of our expertise in voice communication and Altec Lansing’s in music entertainment enables us to meet the full audio needs of the consumer, in their personal and professional lives,” says Ken Kannappan, president and CEO, Plantronics Inc. “We’ve been exploring audio entertainment possibilities for some time. The acquisition of Altec Lansing, with its product portfolio strength and brand reputation, dramatically accelerates those plans at a time when the technology and momentum in convergence is there for us to leverage.”
Altec Lansing will remain in Milford, Penn., functioning as a division of Plantronics. Gary Savadove, former GE Consumer Electronics executive and CEO of Labtec, joined Plantronics six months ago and is president and CEO of the Plantronics Audio Entertainment Business Group, which will now incorporate Altec Lansing. Bob Garthwaite, who has served as senior vice president of marketing and sales for Altec Lansing, will become president and CEO of Altec Lansing after closing of the agreement.
Altec Lansing, with more than $100 million in revenue in calendar 2004, brings to Plantronics a comprehensive range of products and an established market presence in portable and powered audio. Its award-winning inMotion portable speaker systems have become one of the biggest successes of the iPod economy. Just last month, CNET said the following about the new inMotion iM7 iPod speaker system: “Altec Lansing has emerged as a heavyweight in [the iPod speaker] department, anchored by its inMotion series of portable speakers, and its latest innovation, the inMotion iM7, takes the iPod to new heights. It should set the bar for future truly portable speakers. Sound quality is powerful and rich, the device is portable and flexible, and it just looks good.”
In addition, Altec Lansing offers a wide range of computer and home entertainment sound systems and a line of headphones and headsets, allowing Plantronics to provide a more complete product portfolio to its combined retail and OEM channels worldwide.
“From the beginning, we recognized that we complemented Plantronics extremely well, from both corporate and product perspectives,” says Bob Garthwaite, senior vice president of marketing and sales, Altec Lansing. “Both companies go back 40 years or more in their focus on audio quality. Between us, we understand the technical needs of the professional market and the lifestyle demands of the consumer market. And when you look at the growth potential for devices like music-enabled handsets and cellular music decks, the synergies and opportunities become crystal clear.”
“Ultimately it was evident that we shared a common vision with Altec Lansing,” Kannappan concludes. “Both companies were moving toward the immense opportunity for long-cycle growth and innovation created by the unison of digital voice and music technology. Together we’re much stronger and better positioned to achieve that vision.”
We expect that, excluding non-cash acquisition-related and amortization charges, the acquisition will be accretive to Plantronics earnings in FY06. Including non-cash acquisition related and amortization charges, interest expense and lost interest income, we do not currently expect the transaction to be significantly dilutive or accretive to EPS for FY06 as a whole. Finally, including non-cash acquisition related and amortization charges, interest expense if any and lost interest income, we expect the acquisition to be accretive to EPS in FY07.
Houlihan Lokey Howard & Zukin served as exclusive financial advisor to Altec Lansing.
Plantronics stockholders are invited to participate in a conference call that will begin at 2pm PDT. To listen, please dial in five to 10 minutes prior to the scheduled starting time and refer to the “Plantronics Conference Call.” Participants from North America should call (888) 301-8736 and other participants should call (706) 634-7260.
A replay of the call with the conference ID #7739057 will be available for one week at (800) 6421687 for callers from North America and at (706) 645-9291 for all other callers. The conference call will also be simultaneously webcast at www.plantronics.com under Investor Relations; the webcast of the conference call will be available at the Plantronics website along with the slide presentation for the conference.