Many companies are brand names known across the nation or the globe, but Voxx International is probably the best-known, least-known company you’re likely to find. It has always been the business “behind” the brands. The company, which in 2015 moved its headquarters to Florida and kept large operations in Hauppauge, always grew by acquisition.
Voxx continually turned up the volume on its (mostly) audio business, acquiring Acoustic Research, Advent, Code Alarm, Invision, Jensen, Klipsch, Prestige, RCA, 808 Audio, and Terk and others.
That’s in addition to brands such as Audiovox, Hirschmann, Heco, Incaar, Oehlbach, Mac Audio, Magnat, Schwaiger, and others.
But rather than simply selling product, Voxx has reached a deal to sell the company in what’s likely the final chapter of a long acquisition binge, as it’s acquired by a Michigan-based Gentex for $7.50 a share or $196 million.
Zeeland, Mich.-based Gentex, a public company founded in 1974 and listed on the NASDAQ as “GNTX,” is slated to acquire Voxx, whose own history dates back many decades.
Ari Shalam, one of founder John Shalom’s sons and VOXX chairman, said “the transaction with Gentex ensures a seamless transition for our brands, employees, customers and partners.”
The deal is expected to close during the first quarter of 2025, subject to stockholder approval, anti-trust regulatory approvals and other customary closing conditions.
The Shalam family beneficially owns about 1.9 million of Class A shares, with more than one vote per share, and 2.3 million Class B or standard shares, combing for about 57% of voting shares, equaling about $31.5 million for the family at $7.50 per share.
Voxx to Gentex: A deal of details
In a way, this is a wedding between the audio and visual worlds: Gentex specializes in automatic-dimming rearview mirrors and electronics for the automotive industry, dimmable aircraft windows and fire protection products.
Gentex said the majority of Voxx’s revenue is automotive original equipment manufacturing, aftermarket and consumer electronics.
It expects the deal will boost its annual revenues by $350 million to $400 million and to benefit from consolidated purchasing, removing Voxx’s separate public company costs and redundant positions.
Gentex also anticipates from $15 million to $20 million in tax benefits pertaining to tax losses and tax credit carryforwards to offset future profits over the next five or six years. Recent losses, in other words, become tax assets in acquisitions.
Voxx on Aug. 26, 2024, the last trading day before its board said they would explore “strategic alternatives,” also announced Gentex made an unsolicited proposal to acquire the company for $5.50 per share.
A family business
John Shalom founded and grew Voxx, but his son, Ari Shalom, the chairman, announced the deal.
Ari Shalom’s experience and expertise span acquisitions, academia and real estate, including a bachelor of science in economics, finance and management obtained in 1988 from the Wharton Schol, and an MBA from the Harvard Business School in 1996.
He was a senior vice president and director of acquisitions at Taconic Partners, a New York City-based real estate investment firm, from 2003 to 2009.
“He was always a nice guy. I always thought he was pleasant, decent,” one former Voxx employee said. “I guess they’re cashing out.”
Ari Shalom has been a professor of real estate entrepreneurship at Wharton since 2020 and since 2011 has been a managing partner at RWN Real Estate Partners, which has invested in transactions with properties valued at $1 billion.
Ari Shalom’s wife, television producer Rebecca Shalom, is the sister of Jerry Seinfeld’s wife, Jessica. David Shalom, another brother, was deeply involved in the business.
“John Shalom started the company,” the former employee said. “They grew and bought a lot of brands.”
President and CEO Pat Lavelle earlier said they considered a sale, in part, because they believed there was “a significant disconnect in our asset value and stock price.”
“This could mean a sale of our entire business, or additional business or asset divestitures as we still have significant value within our portfolio, as well as owned real estate,” he had said.
Voxx reported a $9.1 million net operating loss for the most recent quarter ended Aug. 31, 2024, as compared to a $8.5 million loss a year ago.
Voxx had been divesting of assets to reduce debt, selling its domestic accessories business and two audio brands, netting about $28 million.
Lavelle said they also sold their Florida real estate and transitioned manufacturing to Mexico, reducing total debt to under $20 million and net debt to under $15 million, which he said is essentially their “normal working capital needs.”
The accidental audio giant
While every business’ story is one of opportunity taken at some point, Voxx’s story is that of a kind of an accidental audio mogul. After graduating from Wharton, John Shalam quit his job in 1965 at the Continental Grain Company to launch a business called Custom Imports, importing from Asia.
They imported just about anything and had, really, little or nothing to do with the audio industry. That was until Shalom used a loan to buy an overstock order of 2,000 car radios.
He called companies listed in the phone book under the category of ‘car radios’ and mailed sample radios to a dozen.
Eleven of 12 placed orders, and when Shalom returned from Christmas vacation, he found customers had already sold out and were hungry for hundreds more.
“At first John says, ‘There are no more radios,’ but the calls don’t stop,” according to Voxx. “It doesn’t take long for the merchant in him to take over and ‘There are no more radios’ becomes ‘How many do you need?’”
Shalom morphed his company into Audiovox, an aftermarket car sound company, or mobile audio business, since many cars came without radios or with poor quality equipment.
“We offered high-power radios, 8 tracks, cassettes and CDs,” according to the company. “Now we include satellite radios and in dash pop out screen systems that are the latest in entertainment and information convergence.”
Audiovox in1987 went public on the American Stock Exchange as VOX, later moving to the NASDAQ with the trading symbol, VOXX. In 1991, it divided its operations into wireless and electronics and in 1997 shipped its first mobile video product.
They in 2004 sold their cellular subsidiary to grow their electronics company “organically and through acquisition,” acquiring Terk Technologies, a high-end indoor and outdoor antenna and accessory company.
“They used to be in the cell phone business,” the former Voxx employee said. “They sold that when everything went from analog to digital.”
Florida and forward
It wasn’t until around 2000 that the company got what it calls “serious in the acquisition mode.” Voxx grew through acquisitions even as in 2015 it announced plans to move to Orlando, Fla., citing a “business friendly” climate.
“They moved the warehouse operations to Florida,” the former employee said. “Top management had to be in Florida.”
Voxx said it would keep various departments in Hauppauge, even as it opened a $17 million headquarters in Orlando. This deal, however, was only the latest in the automobile audio sector, where some other big suppliers have been acquired.
Some other, even larger companies have been acquired over the years. Samsung, for instance, acquired Harman International Industries, a maker of high-end entertainment systems for cars, in 2017 for $8 billion.
“They were number one in the field for consumer electronics for automobiles,” the former Voxx employee said. “That took out the number one company.”
Gentex also has been in acquisition and expansion mode. The company said it will obtain access to Voxx’s EyeLock iris biometric technology, developed through a joint venture, and believes their own “expertise in high volume manufacturing” can lead to savings.
Gentex, meanwhile, also has been expanding by launching products, such as Place and HomeLink Smart Home Solutions.
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