Directed Electronics to Acquire Polk Audio for $136 Million

Directed Electronics to Acquire Polk Audio for $136 Million
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Directed Electronics Inc. has entered into a purchase agreement to acquire Polk Audio, maker of the I-Sonic tabletop HD Radio that recently began shipping to Tweeter locations.
The company is paying about $136 million in cash for the Baltimore-based Polk. The I-Sonic product also receives XM; the company is touting the product as the first that can receive both HD-R and satellite radio.
Directed also sells several Sirius FM modulated products recently flagged by the FCC in its emissions probe.
Current Polk management and staff will join the Directed staff after the acquisition, DE President/CEO Jim Minarik told investors. The deal is expected to become final in the third quarter.
Minarik said the companies are a good fit and the acquisition complements DE’s product line. Directed has what it considers a solid position in the satellite radio aftermarket niche because of its Sirius products, while Polk has expanded its home audio speaker line to complement home theaters. The deal will allow DE to expand its home audio business and create shareholder value, he said.
Founded in 1972, Polk sells to customers such as Circuit City, Tweeter, Fry's Electronics, Crutchfield and AVAD Distributors. Co-founders Matthew Polk and George Klopfer will serve in consultant roles.
Including Polk Audio's approximately $86 million in net sales for year ended June 30, Directed's net sales would have been approximately $435 million for the period.

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