Last week found Recoton struggling to keep its head above water. This week Gemini Industries tossed the beleaguered company a rope, announcing that it had reached an agreement to acquire Recoton’sconsumer electronics accessories business. In support of this transaction and Gemini’s growth plan, the company raised new funding from Boston-based Parthenon Capital.
As part of the new deal, Gemini and Recoton say they have also entered into a transition agreement which, among other things, will provide Recoton’s customer base with a continuity of timely delivery of products. Recoton had filed a voluntary petition to reorganize under Chapter 11 on April 8, and the acquisition and transition agreements are subject to bankruptcy court approval as well as customary closing conditions.
This isn’t the first acquisition for Gemini, which picked up Zenith’s accessories business back in July 2001. With Recoton on board, Gemini says it is now one of the largest manufacturers and distributors of consumer electronics accessories in the world. The company’s portfolio of consumer brand names includes Gemini’s Philips, Zenith, Magnavox, Southwestern Bell, and For Dummies brands, as well as Recoton’s Jensen, Acoustic Research, Advent, Discwasher, and Ambico brands for accessory products.
With its increased size and scale, Gemini claims it will now be better positioned to serve the needs of the larger national and international retail chains that comprise the fastest growing channel for distribution of consumer electronics accessories. The company’s Michael O’Neal explained, “The acquisition will provide access to new customers, enhance our competitiveness, and put us in a stronger position to serve the large, in many cases global, retailers that have emerged as the marketplace has consolidated.”
“This acquisition is a significant next step in Gemini’s long-term growth strategy,” added O’Neal. “We now look forward to a number of attractive growth opportunities, including further development of our premium cable and wireless businesses.”
Founded in 1964 and headquartered in Clifton, New Jersey, Gemini sells over 1800 products, including headphones, antennas, audio/video cables, surge protectors, telephone accessories, and CD media products. Gemini says its primary customers include mass merchant, discount, and specialty retailers such as Wal-Mart, Kmart, Target, Sears, Best Buy, Circuit City, Menards, Lowes, TruServ, and CVS.
Source: Stereophile Magazine