What do you do if guitar sales are slow? If you’re Gibson, apparently you expand your horizons by scooping up consumer electronics companies.
In January 2012, Gibson Guitar made a healthy investment in Japanese electronics manufacturer, Onkyo, becoming the second largest shareholder in the parent company and the majority shareholder in Onkyo USA. The move was part of a new strategy involving Gibson’s Pro Audio division. Together, the two entities formed a Hong Kong-based joint venture focused on design and development of consumer audio products.
As a result, Onkyo USA became the latest addition to the Gibson Pro Audio division, which already included KRK, Cerwin-Vega, and Stanton. Onkyo makes some of the best AV receivers around and has relatively strong distribution, so the purchase made perfect sense. Now we’ve learned that Gibson Pro Audio just got a little larger with the $52 million acquisition of TEAC, giving the company 54 percent ownership of the Japanese manufacturer.
TEAC’s high-end audio brand, Esoteric, is considered to be one of the finest brands of audio in the world, offering a collection of high-end DACs, amplifiers, pre-amplifiers, and cables. Esoteric also has an interest in digital hardware manufacturer, M2TECH, which offers USB/S/PDIF converters and USB DACs that are far more affordable than Esoteric’s mega-buck products. The deal also includes distribution rights to French loudspeaker manufacturer, Cabasse, which Esoteric USA has been handling.
Gibson’s expansion into high-end audio comes on the heels of the Fine Sounds shopping spree which saw premium American audio manufacturers, McIntosh, Audio Research, Wadia Digital, and Sumiko (which handles distribution of Sonus Faber, Sumiko, REL subwoofers, and SME turntables and tonearms) added to the Italian private equity firm’s holdings. The addition of TEAC gives Gibson both respected brands, distribution, and technological expertise in the areas of home and lifestyle audio.
The Japanese manufacturer offers everything from sound docks, headphones, desktop audio systems, USB DACs, and loudspeakers; giving Gibson products in both the value and high-end categories.