Masimo Acquires Sound United - Are Denon, Classe, Polk, B&W, Marantz, going to fade away??


FOMO posted a yt that describes the overall financial overlay of the deal and why he thinks it may portend bad news for Audio and HT fans. In the near future, some very well known, iconic brands may no longer have the financial backing they've been able to enjoy up to now. Could this be the end of these brands as we know them? What do you think?

 

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The history of unrelated acquisitions isn't great so there probably will be some casualties from this. Most likely, over time some of the business will be deemed to be non core and sold off again.

I am no Harvard or Stanford MBA but I fail to see the business rationale for the acquisition by Masimo, a medical technology company, of Sound United, a pure play consumer audio and video entertainment umbrella of companies. I hope I am wrong but Masimo may just want to "milk" Sound United’s cash flow as implied in the video above ? I am worried but the Marantz brand has had its ups and downs over the decades... B&W also has very strong brand recognition and I am confident it, along with Marantz, will be able to survive post Masimo.

HiFi history is littered with the victims of unwise mergers and acquisitions.  a/d/s/ was bought by DEI, makers of car alarms...and disappeared.  Boston Acoustics once had a strong market position and has all but disappeared.  Nakamich and Sansui could be competing with Luxman...but aren't, due to lack of investment in  their once iconic brand reputations.  Time will tell whether Masimo will nurture the SU brand potfolio or squander it several jewels.  

Look at it from the position of the companies that were bought: If they weren’t already financially hemorrhaging, they would not have been sold. THATS the real takeaway here.

I think the audiophile industry thinks they can exist without advertising.  I have a realtor send me listings of new homes for sale and I yet to see two speakers in any of their rooms.  Does this mean people don't like music or do they not know there is a different entertainment platform available.  I think it is nice to have people over for dinner or a couple glasses of wine, turn on the stereo system to provide some nice background music.  Maybe we all need to do this to make people aware.  They will spend $3,000 on a 65 inch TV and not add speakers to listen to TV.  I cannot believe people will buy a $5,000 entertainment cabinet and then listen to TV speakers.  They also live in a $million home and won't spend the money to watch movies using surround speakers.  It is like manufacturing speakers and then expecting business to come.  The audio industry needs to advertise in order to market and show people there are better alternatives.