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VOXX International acquires majority of Directed's Automotive aftermarket business

Christian Fernsby ▼ | July 7, 2020
VOXX International Corporation announces it has acquired the aftermarket vehicle remote start and security systems ("RSS") and connected car solutions ("CC") businesses of Directed, LLC and Directed Electronics Canada Inc.
VOXX International
Directed   VOXX International
This transaction was completed on July 2, 2020, via an Asset Purchase Agreement. VOXX DEI LLC, a newly formed 75% owned subsidiary of VOXX and VOXX DEI Canada Ltd. are the Buyers.

Topics: VOXX International

The cash purchase price is $11 million and the assets the Buyer acquired include inventory, accounts receivable, IT systems, intellectual property (which includes patents, trademarks, domain names, and copyrights), plus certain fixed assets.

The Buyer, following a soon-to-be-completed agreement with Nutek Corporation in exchange for 25% of the newly formed subsidiary, will assume ~$4.2 million in trade payables and claims, and certain obligations in Canada related to retention of employees and real estate leases.

After speaking with various parties during its due diligence and based on the value of inventory and accounts receivable, the Company believes it should generate more than $10 million in cash within the next two quarters.

The Company also expects the acquisition of assets to be accretive in this current fiscal year, taking a conservative near-term outlook based on the current COVID-19 environment. This transaction is expected to add ~$50 million in net sales on an annualized basis, provided there is no further deterioration in the economy due to the global pandemic.

Directed has been VOXX's primary competitor in the North America RSS business for years, and to a lesser extent, in the CC segment (telematics).

Now, the combination of assets provides VOXX with a stronger offering for its customers, while also expanding its distribution network. Further, the addition of Directed's top-tier engineering team will help drive innovation as it brings together the best engineering talent in the industry.


 

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