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NEW OWNERS of McIntosh

dewickt

dewickt

Will fix about Anything
FOR IMMEDIATE RELEASE

Grange and Randall Lead Management Buyout of Fine Sounds Groupin Partnership with LBO France and Yarpa

Owner Management to Fast-Track Plans for Accelerated Global Growth

New York, April 2014 --- Mauro Grange, CEO of Fine Sounds SpA, and Charlie Randall, longtime President of McIntosh Laboratory, Inc.,have announced their plans for a management buyout of Fine Sounds Group in partnership with LBO France and Yarpa. The acquisition will facilitate greater opportunities for global collaborations amongst the product development, marketing, distribution and finance teams of each of the Group’s portfolio of brands, which includes Sonus Faber, Audio Research Corporation, Wadia Digital, Sumiko and McIntosh.

Grange, Randall, LBO France and Yarpa are purchasing Fine Sounds Group from Milan-based investment firm Quadrivio, which has owned the Group since 2008.The company headquarters will subsequently relocate to New York City, with Grange serving as Group CEO and Randall serving as Group COO and President of McIntosh concurrently.

Mauro Grange, a dynamic entrepreneur,joined Fine Sounds Group in 2009 with the intention of creating the most illustrious group of brands in high-end audio. He spearheaded Fine Sounds Group’s 2012 acquisition of McIntosh– a brand synonymous with ultimate quality audio worldwide –and thereby became acquainted with McIntosh President Charlie Randall. The two forged an outstanding relationship, dedicated to building the combined company into a leader in the international luxury audio arena. In just two short years, Grange and Randall made substantial progress leveraging distribution synergies between the Group’s brands, which are some of the best in the industry.

According to Grange, “When Charlie and I met, there was instant chemistry. We both had the same vision for the future – merging Fine Sounds and McIntosh in order to create a leading group of luxury lifestyle brands.When the opportunity presented itself to buy Fine Sounds back from Quadrivio, it was a dream come true for us both. Thanks to our partnership with LBO France and Yarpa – two of Europe’s leading private equity firms – we can now fast-track our plans for accelerated global growth and a commanding presence in high-end audio.”

Charlie Randall has been an integral part of the McIntosh family since the start of his professional career in 1985, and it was his deep knowledge of the products and passion for engineering and design that afforded him the opportunity to be named President in 2001.“Having grown up at McIntosh, it has been a lifelong dream of mine to own the company,” said Randall. “When I met Mauro, I knew we were going to do great things for McIntosh and Fine Sounds – things that would create a dynamic positive change in the industry.”

“The brands under the Group umbrella are some of the most respected in the high-end audio industry,” said Yarpa CEO Roberto D’Angelo. LBO France Director Philippe Guérin added “With Mauro and Charlie at the helm, we are confident the company is going to be a great success and are thrilled to be partners in this exciting acquisition.”
 
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I get nervous when the pe guys do the lbos. It can be good or a disaster depending on the operating culture of the financiers. If they leave them alone, focus on growth and honoring the cultures and brand equity in their strategy and execution could be great. If not, then it could be awful. Generally, the focus is on building the brand, expanding and investment but at some point the exit strategy has to come into play. PE guys are not banks. They are looking for multiple expansion on their capital. Time will tell. I would assume more new products, maybe higher prices, more integration across the supply chain, shared resources in r&d, some commonality between brands at the component level. I had expected some if this from the acquisition but I would think it will accelerate now.
 
joekapahulu said:
I get nervous when the pe guys do the lbos. It can be good or a disaster depending on the operating culture of the financiers. If they leave them alone, focus on growth and honoring the cultures and brand equity in their strategy and execution could be great. If not, then it could be awful. Generally, the focus is on building the brand, expanding and investment but at some point the exit strategy has to come into play. PE guys are not banks. They are looking for multiple expansion on their capital. Time will tell. I would assume more new products, maybe higher prices, more integration across the supply chain, shared resources in r&d, some commonality between brands at the component level. I had expected some if this from the acquisition but I would think it will accelerate now.
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Anytime something like this occurs in industry employees lose. First example, front office personnel staffs such as accounting, marketing, etc. will be trimmed by layoffs. Its happened a million times.
 
jlovda said:
Anytime something like this occurs in industry employees lose. First example, front office personnel staffs such as accounting, marketing, etc. will be trimmed by layoffs. Its happened a million times.
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Pretty negative view don't you think? I cant see McIntosh fitting that mold, I'm not pretending i know whats going on, but as I understand it, McIntosh is a small boutique company, if they laid people off, there would be no one left.....

I see it more as McIntosh expanding to bigger things, that means more of everything doesn't it?

But hey, one mans opinion, and I could be completely wrong in which case I stand corrected.....I'm just not into the "doom and gloom" approach to life however misguided that may be....
 
I see this as a good thing because the company will be owned by the president of the company if I understand it correctly. I am sure there will be no layoffs and if anything the company will expand with more products.
 
kevzep said:
I see it more as McIntosh expanding to bigger things, that means more of everything doesn't it?
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You have to consider the 'Bean Counter' mentality that generally happens after an acquisition.
A few examples:
Gibson Musical Instruments was acquired by the Norlin Co. in 1969, or thereabouts. There was an immediate free fall in quality that persisted until (What was left of) the company was sold in (circa) 1986. Shrewd marketing of a 'vintage spec' /'Custom Shop' line brought Gibson back from the brink. The same thing happened when CBS acquired Fender Musical Instruments..(c. 1965) The most desirable Fender guitars, and amps today are regarded as being of 'Pre CBS' manufacture.
Fender ultimately used the same vintage/custom shop business model as Gibson after it was sold off by CBS with much success. In both cases, some unbelievably bad products were sold, and there was a waiting period of many years before bean counters were shown the door, and the brands were restored to some semblance of their former glory. As a guitarist for over 40 years, I had lots of first hand experience playing some of that junk during those dark days.
I can only hope that clearer heads are involved with this Mcintosh transaction. That press release is tweaking my inner B.S. detector......
 
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quartersaw said:
You have to consider the 'Bean Counter' mentality that generally happens after an acquisition.
A few examples:
Gibson Musical Instruments was acquired by the Norlin Co. in 1969, or thereabouts. There was an immediate free fall in quality that persisted until (What was left of) the company was sold in (circa) 1986. Shrewd marketing of a 'vintage spec' /'Custom Shop' line brought Gibson back from the brink. The same thing happened when CBS acquired Fender Musical Instruments..(c. 1965) The most desirable Fender guitars, and amps today are regarded as being of 'Pre CBS' manufacture.
Fender ultimately used the same vintage/custom shop business model as Gibson after it was sold off by CBS with much success. In both cases, some unbelievably bad products were sold, and there was a waiting period of many years before bean counters were shown the door, and the brands were restored to some semblance of their former glory. As a guitarist for over 40 years, I had lots of first hand experience playing some of that junk during those dark days.
I can only hope that clearer heads are involved with this Mcintosh transaction. That press release is tweaking my inner B.S. detector......
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I think Steinway went thru that too.
Hopefully Mac won't go Dilbert-corporate, time will tell.
My SO has worked for Kinkos since before the founder was forced out, it has a downward spiral into Dilbertopian corporate hell since.
 
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Remember, with Randall serving as Group COO of the new conglomerate and President of McIntosh, he will be spending a good part of his time and energy in New York City. I hope he chooses someone with corporate vision and business savvy to directly run Mcintosh in Binghamton in the future. Randall cannot run Mcintosh full time in his new role.

We haven''t heard from Ron_C for awhile. I wonder what insights he can provide?
 
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These changes put a big question mark on the vision of the company for the future. I too agree that the terms "Luxury Lifestyle Brands" makes me nervous. If they are going to take this brand down the luxury pathway replete with champagne parties, I am taking my dollars elsewhere. In their website, McIntosh advertised about the mega showroom in Shanghai. I was there for a business trip two months ago and decided to pay them a visit. The place was all boarded up while Bose was just a few doors away humming away. McIntosh has never been a luxury brand, and taking it down that path will only mean turning out products that people will eventually stop buying. Famous people owned McIntosh not because of it's champagne parties but because it was an engineering tour-de-force. A company owned and run by engineers and music lovers who produced some of the best engineering that has withstood the test of time and turning tastes. To try and change the DNA in the company is a great folly and see them lose potential clients to well established brands in the luxury brand arena while a dwindling of traditional McIntosh owners like many of us here. It has happened to them before and will happen again.
 
So McIntosh is not a "Luxury" brand??? I am an Audio Research owner and I am affected as well. Fine Sounds owns several really great brands. I honestly feel better with an investment group having ownership. They tend to leave their holdings alone as long as they pull their weight in their portfolio. Having a couple with strong affiliation with one brand buying the entire group, might be problematic. I realize that this is the Mac section, but it would be a shame to see ARC, Wadia, Sonos Faber and Sumiko go down the tubes in an attempt to broaden the McIntosh line. I honestly have been a little worried about some of the Mac releases lately. I would much prefer to see them focused on their core product rather than things like turntables.
 
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McIntosh has flourished since being owned by Fine Sounds.I've known Charlie since he was V.P. of Engineering. When he took the position of president we were in the red with Clarion he changed the whole layout of the factory and made it more efficient and increased sales to double what they were. we are all working overtime trying to keep up with demand.He is very dedicated and A great guy to work for.I feel now he will have more control over things and the direction we need to take.I can only see things getting better...AMEN
 
I certainly did not intend for my post to seem overly negative but rather more cautious. I hope indeed that the financiers provide support and allow Charlie Randall to build the business. I know that there has been some of the type of consolidation common to these deals already, e.g. Wadia moved into Mac space and is tapping their r& d expertise. Im all for that kind of smart synergy. However, I too was bothered by the lifestyle brand reference as I am not sure what the vision is either. If it continues with great equipment that is modern but doesn't lose or squander the engineering and production heritage, I.e. Still results in good solid equipment I will be thrilled. BTW, I am a semiretired corporate MBA type with a background in brand marketing, strategy consulting and finance so I have seen more than a few of these deals before. I hope this is like the best of them. I am just getting to be deeper in Mac equipment beyond the few vintage pieces I own.
 
I concur BayouTiger. They seem to put out lots of products ( cables, headphones ? ) but their core products could use more polish. I really hope Mcintosh can be profitable while keeping the other brands in the portfolio as original as possible. Consolidation in a smart sense is good, but it should not become a compromise for the sake of turnover. I'm keeping my fingers crossed with much positive hope.
 
Consolidation can be smart, but will the number of high end dealers continuing to shrink there's something to be said for having more lines in the water as well.

It's good to hear that the ones buying it are involved in the technical side as well. My worry with McIntosh is always the image side of the equation. I know the die hards would never want to hear it, but there are many, many people out there that own Mac because it is pretty much the glamour name in Hi-Fi. I have no problem with broadening the line so that an owner can have all pretty matching components as long as they bring the quality and performance that has defined the line for decades, but I am not certain that that is always the case.
 
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