B&C Speakers is one of the leading loudspeaker manufacturers - listed on the Euronext Star Milan stock index of the Borsa Italiana - and also the owner of Eighteen Sound and Ciare, which were acquired in 2017. With organic growth and acquisitions, the Italian company has consistently expanded its market leadership and annual business results. The possibility of the Eminence Speaker acquisition was not exactly a surprise for the industry, given that rumors about the intent have persisted for quite some time, and as negotiations and due diligence were taking place.
The Italian company acquired 100% of the share capital of Eminence Speaker LLC from Eminence (owned by Eminence Holdings) and a significant part of its assets through a new company (Newco) wholly owned by B&C, the establishment of which was an essential condition for the implementation of the agreement.
The establishment of this Newco, enabled the consequent purchase of Eminence Dongguan Enterprise Co. Ltd, an operation which allows the acquisition of the company's manufacturing operations in China, considered strategic in order to consolidate and develop - also through additional investments - the results achieved by the brand Eminence throughout Asia.
Details of the transaction released by B&C Speakers confirm that the acquisition of the two companies in US and China was agreed for a value of $4,495,000 (USD), which B&C Speakers financed using its own financial resources. Price paid to Eminence Holdings LLC, is $3,551,000, taking into considerations the companies financial obligations, while acquisition of its operations in China (inventories and tangible assets) from Eminence Dongguan Enterprise Co. Ltd was agreed for $943,000 (USD), paid by B&C Speakers China (NewCo) as the establishment process is completed.
Eminence Speaker has a staff of about 90 and is active mainly in the design and manufacture of loudspeakers for professional audio applications, musical instruments, and after market car audio. Currently, the Eminence brand is present in over fifty countries through appointed distributors (mainly for the MI line) and OEM activities.
Retiring Chairman Rob Gault added, “We have known and respected B&C for around 30 years. When I decided it was time to retire leaving no family members at Eminence, B&C was my first choice as a buyer. It was always my family's goal to leave Eminence in good hands - hands that we were sure would protect the reputation of Eminence, along with its employees, suppliers, and customers long into the future. I'm sure there will be changes at some point, but for now, I expect business to continue more-or-less as usual with Eminence."
The acquisition of Eminence's operations in the US and China will allow B&C Speakers to expand its international strategy with a brand that is recognized and respected in the geographical markets that it traditionally addressed, and with its range of MI loudspeakers, a segment that B&C has not addressed directly. For the professional audio market, the brand will enable B&C Speakers to directly control its operations from the United States, reinforcing its longstanding relationships with some of the largest audio brands.
B&C also revealed the intention to strengthen the Eminence brand globally, and launch new products by leveraging its expanded production capabilities, which can offer interesting opportunities for supply chain efficiency in South-East Asia. The availability of two new production plants will also offer B&C the possibility to better manage the ongoing North American manufacturing reshoring trend.
“Eminence customers and products are largely complimentary to B&C’s current activities. This is a clear case of the whole being greater than the sum of its parts," comments Ron Tizzard, CMO of B&C Speakers. “The B&C Group has enjoyed a significant surge in demand in recent years, especially since the end of the global pandemic. With the addition of Eminence to the group, we are well positioned to be a more dynamic and cost appropriate supplier for our global customer base."
During the acquisition process, B&C Speakers was assisted by Kt&Partners as financial advisor, with legal support from Nelson Mullins Riley and Scarborough LLP in the US, and Gia for China. Deloitte carried out due diligence activities.
In 1966, Bob Gault founded what was to become the world’s largest loudspeaker manufacturing company after working as an engineer for Magnavox and CTS (Chicago Telephone Supply). Gault started Eminence building only three 18” speakers per day, based on a commitment from Ampeg’s Everett Hull. Gault was the president of Eminence from the company’s inception until 1992. He officially retired in 1993, but continued to make valuable contributions to the company until he passed away in 2002. Under the leadership of Gault, followed by his son, Rob Gault, the company's capacity grew to over 10,000 speakers per day, employing nearly 200 people.
Eminence, Kentucky (population 3000) is centrally located in the heart of Kentucky, between Louisville and Lexington, Kentucky and Cincinnati, Ohio. Bob Gault chose this location as it was ideally situated for shipping products all over the USA. The Eminence and Henry County community could also provide the labor needed to manufacture products on a large scale. The first Eminence facility was located in downtown Eminence, and employed around thirty people. In 1972 Eminence Speaker moved to its current location in Shawnee Industrial Park on Mulberry Pike.
Originally a supplier to OEM manufacturers only, Eminence began distributing its own line of branded products in 2000, and expanded distribution to over 90 countries. In 2006, Eminence expanded its worldwide operations with the addition of Eminence Dongguan Enterprise Ltd. The 96,000 sq. ft. facility was part of the international Eminence effort to provide loudspeaker manufacturing capability in areas strategically located near manufacturers of musical instrument and professional audio products. In 2009, Eminence further expanded its Asia operations with the addition of the Eminence Cabinet Shop, providing turn-key solutions for professional audio enclosures, finished systems and components, and guitar and bass amplifiers.
www.eminence.com
www.bcspeakers.com
