Audiovox Signs Letter of Intent to Acquire Terk Technologies Corp
Pending transaction further enhances Audiovox's position as a leading supplier of satellite radios
Audiovox Corporation today announced that its subsidiary, Audiovox Electronics Corp. (AEC) has signed a letter of intent to acquire certain assets comprising the business of Terk Technologies Corp. ("Terk") for a purchase price of $13.6 million plus a debenture based on achieving future revenue targets.
Terk is a leading provider of satellite radio receivers and digital antenna products. The Company has an agreement in place to provide existing and develop future car stereo aftermarket products for XM. Some of the Terk's other products include TV and AM/FM antennas with an emphasis today on High Definition (HD) technology. The companies anticipate based on due diligence that Terk's Net Sales for the year ended December 31, 2004 will be approximately $50 million.
Commenting on the deal, John Shalam, Chairman, President and CEO of Audiovox Corporation stated, "The proposed acquisition of Terk marks our first transaction since the sale of our Wireless business to UTStarcom. Terk brings significant expertise in the specialized satellite radio industry, which we have identified as a fast growth high tech market and we believe it will serve to strengthen our position for future growth in that segment."
Patrick Lavelle, President and CEO of AEC stated, "This purchase is yet another step we are taking to further expand our portfolio of technology driven products. It is synergistic to our existing distribution channels as well as internal operations. We already enjoy a leading market position in satellite radio and with the addition of Terk, believe we have further strengthened that position."
In addition to the Terk branded products, Audiovox will also assume the exclusive distribution rights in the United States for Vogel's line of high end LCD and Plasma TV mounting systems. Lavelle further stated, "We are also excited about the potential of the Vogel line due to the projected growth of the flat panel market in the U.S."
The consummation of the purchase is subject to a number of conditions including completion of a definitive agreement and fulfilling due diligence and other terms and conditions customary or applicable to this transaction. The Company anticipates a closing by December 31, 2004 or shortly thereafter.
Shalam concluded, "We continue to evaluate additional business opportunities that can contribute to our company's growth. With a clean balance sheet, little debt and access to capital, Audiovox is well positioned to be a player in the M&A market and it is our intent to continue to pursue strategic acquisitions that will help grow both our top- and bottom-line results."
About Audiovox
Audiovox Corporation is a leading international distributor and value added service provider in the consumer electronics industry. The Company currently conducts its business through Audiovox Electronics Corporation (AEC), a wholly owned subsidiary. AEC is a recognized leader in the marketing of automotive entertainment, vehicle security and consumer electronics products. The company is number one in mobile video and places in the top ten of almost every category that it sells.
Among the lines marketed by AEC are its mobile electronics products including mobile video systems, auto sound systems including satellite radio, vehicle security, and consumer electronics products such as portable DVD players, flat-panel TV's, extended range two-way radios, multi media products like MP3 players, and home and portable stereos. The company markets its products through an extensive distribution network that includes power retailers, 12-volt specialists, mass merchandisers and an OE sales group. The company markets products under the Audiovox, Jensen, Acoustic Research, Advent, Code Alarm and Prestige brands. For additional information, visit http://www.audiovox.com.
