McIntosh Group purchased by PE firm

I doubt that. Usually if a well loved company was going out of business or going downhill it would make fans want to buy up pieces that were available

Is this why I see so much used Mc for sale now. And more than a few dealers listing a good bit of Mc inventory? 

True larsman. I just think it's best to let things unfold S they will instead of thinking of the worst and hanging the crepe before anything bad happens.

 

@roxy54 - sounds like the definition of a forum thread! 🤣

All a lot of guessing and conjecture.

One of the three companies I worked for that was bought out by PE went bankrupt a few years earlier and was bought in bankruptcy by one investment company, who sold their interest to another a few years later, etc.  The guy who I worked with had 25+ years with the company and his retirement was all in company stock, which evaporated as a result of the bankruptcy.  He wasn't quite old enough to retire.  When the next set of investment firms bought the company, they outsourced most of IT and offered to "rebadge" him to the outsource firm, reducing his annual salary by $12k, reducing his vacation benefit by two weeks, increasing his contribution for health insurance, etc.  As you can imagine, he said "no thanks" to those "generous" offers and quit suddenly.

I sure hope that McIntosh had a 401k with a decent match and that the line employees participated, in case my story (above) will apply to them.

@osodelnorte I see you've gone full McTard.

Well, they have been selling a “dealer” light box for years… so not much new there.

The idea to make it able to store some other brand’s component and conceal it is kind of clever.

Well, looks like that private equity firm came up with a great idea to recoup some money and spread that McIntosh love: a $1,500 faceplate tacked onto a box.

Al the best,
Nonoise

@bigtex22  Sorry about that.  I guess it would be better to have posted:

Its 1960.  Let's go listen to a Mc + Klipschorn system.  Maybe they will play that thing where the train whistle goes from one speaker to the other...you know, STEREO.

Better?

Pretty face-plates and mil-spec components (Levinson) do not an accurate signal path make, sorry to say.  I like Mc, but if you are worried about their downfall after being purchased by yet another PE company, I wouldn't.  They will still be popular with a specific crowd, and I am sure their circuitry has improved a bit over the years to be closer to better companies today.  After all, they have to charge enormous prices to make sure the PE gets its cash back before they guarantee the first loan.

Cheers!

McIntosh has weathered the storm in the past. I believe that they will do so again and find a path to ongoing audio growth. The negative commentary adds nothing! Only savvy fate plays an important role here. The administrative powers of McIntosh are in a much better position to decide the future of American built audio gear than any naysayer is. What shall be, shall be. Like McIntosh or not, we should all hope the future resides in Binghamton, NY. 

Bro, you lost me at “Mc has been 3rd rate forever and will remain so.”  Haters gonna hate. 

Not fact is they are not what they were and reduced their US footprint by 50 % give or take.  Zero was harsh and not factual but the point is they are not the Iconic bran they were.

   

 

 

Another person who cannot face the facts. Oh joy. That's okay. GE's largest segment is in the crapper as aerospace has been in the tank for 4 years. less than 20% of the manufacturing capacity of GE in in the US. Yep a juggernaut. 

@cleeds let me help you. 

 

How many plants does GE have in the US?

The number of GE's manufacturing plants in the US has dwindled from 191 in 2017 to 82 plants in 2020.

GE has over 500 plants offshore. 

Aerospace is big for GE as is Health Care and all of the HC unit products are made in Asia. 

   

 

@lordmelton  you have a very valid point on the current state of affairs in the United States. Most tire companies are owned or manufacture in China due to lax environmental standards. That trend has been going on for decades.  

Mc is an American Icon in Hi-Fi like them or not and it would be a shame to see them go the way of other iconic American brands like General Electric that has zero US manufacturing now. 

I also hate to say that @jerryg123 has a point also. Many here are looking for the car crash or the body covered on the side of the road. 

Nationalism aside some offshore production of products is necessary, it is just when companies misrepresent this and say made in the USA, or the EU and it is merely assembled of all offshore content. Truth in packaging and COO so the consumer can make the decision weather to buy or not. Voting with their wallet?

I hope that the PE Venture works out for Mc as this is not their first foray into PE waters.

Time will tell. 

 

@jerryg123 I never said Thailand saved Ducati, HD had a disastrous affair manufacturing in India which was in essence pulled back by Trump.

Triumph is exclusively manufactured in Thailand and has been for a long time.

Pirelli is 100% Chinese owned. Along with hundreds of US and European companies.

I am not pro Chinese, far from it, but if you keep voting for Biden the clown it's just going to get worse until China is your overlord.

@jerryg123 You interpret stuff interestingly, but no surprise. Mc has been 3rd rate forever and will remain so. BUT, it is PRETTY! Rich people LOVE IT.

Anyway, PE is in business to make cash, which, from what I can tell these days, is the ONLY reason man is on this Earth. Used to be people were fairly nice and if someone was successful, they realized they owed that success to many others.

Today, the goal is to amass as much as possible and have your name in the public as often as possible. YOU have ARRIVED and are VERY IMPORTANT. Having amassed a fortune, the rest of the world bows down to you like they used to bow down in their chosen place of worship or when contemplating how the universe survived for 4.5 BILLION years without THEIR help!

But, I digress. If something did not happen 5 seconds ago, it is irrelevant, and if you ain’t makin’ a billion a minute, get outta my way.

PE is usually a money grab for one or two people who will never have ENOUGH.

OR, if you stole 400 Billion of your nation’s money, you could start a war and murder everyone in another nation BECAUSE YOU CAN.

We only get 75-100 years here. To the universe, we are pretty much irrelevant and always will be, no matter how much CASH we have or people we murder.

As for Mc, really, at the end of the day, who cares? Some individuals will make a bundle and the world will survive, probably.

Cheers!

In College 40 years ago a girl dumped me for another guy who had a part time job in a High End Audio store.  My system  at the time was Advent 3 Speakers, the cheapest Gerrard Tt and Pioneer Receivers available.  This guy bragged about selling McIntosh and I thought why would anyone brag about selling Fruit?

  One night I was fortified with a few beers and found myself outside his store.  I barged in looking for trouble.  The sounds of the music in the store immediately calmed the savage beast.  I didn’t know recorded music could sound like that.  And the wall full of equipment with those meters….My erstwhile rival played me a few things as the store closed.  We didn’t exactly part as friends…I was being to much of a jerk for that to happen…but that was my introduction to high end audio.

  McIntosh still makes great products, and I’ve owned a few, but they are synonymous with conspicuous consumption.  I wiil never forget the scene in the movie The Departed when Matt Damon, playing a corrupt cop, shows off his wall of McIntosh components as “fruits” of his ill gotten gains.  I hope they stay afloat, but in this recession, with retirement looming, I will probably never own one again

I think it is funny how some are so green with envy of McIntosh and their success that you are rooting for them to fail.

Kind of gross. 

Lordmelton all Ducati race and street bikes are built in Italy for US and European Markets (their largest markets). Thailand for Asian market (you know) and Brazil for Latin American markets.

Just like BMW, Toyota, Honda, Hyundai build cars in the US to beat tariffs and shorten supply chain.

Thailand did not save Ducati, help maybe but none of those bikes are making it to major markets. Just like HD in Taiwan.

 

 

I am not trying to change the subject. But a few of us, were talking...

 

"China", (people's republic of), is no one's friend.

Not even if you happen to be Chinese.

   "IT", really only has but (one), very singular goal.

And "IT" will not ever stop nor have any mercy or remorse for the horrible things "IT" does on the way to "IT's" goal. The same horrible things as today, tomorrow and yesterday. Things of a type that can and do, make even a "hardened" man shiver.

Not in fear. But in the reality of it.

But maybe it should be fear as well.

American's, "for the most part" have forgotten. And "IT" knows this, understands this, and uses that and everything else that it can, against us. And "IT" has been  playing the, "Long-Game". As we have fallen asleep at the wheel. 

I really do hate writing this. But I know the truth of it. As all of us who drilled ceaselessly against that day we each hoped would never come. And for awhile we thought we had just "Dodged that bullet" as they say, "somehow".

But now it feels to be possibly, quite close.

    Learning all that we could of the adversary was trying. But I remember, and still know enough to ask you. To ask yourself "One Question". And hope that you would take a moment to seriously ponder it. Just long enough to answer it.

Just to yourself.

"IF", (IT) achieved it's goal? Exactly where and what would "your" place be in that reality? And also query the same, about your loved one's and friends etc...

 (I think). That you might be awakened just enough to remember. Or, failing that. Have you at the least, "Wish to learn of this threat".  

"I hope and pray, this is so".

Because "Putin"?

     He's a pussycat,

       "By comparison". But given a chance? An opportune time?

They "would" work together!

Anyway....and since I am already here...

Have a Happy Father's Day!

 

I wouldn’t think the Highlander Group will bankrupt McIntosh, but if it did it gives a wealthy McFan the opportunity to buy the name.

I see them selling the Texas property (if it is owned) or developing it and then selling it. Lay off all but essential staff with the excuse of preparing for the coming recession.

Take advantage of Biden’s soft stance on China and China’s investment and tax incentives.

With the high Dollar this is a perfect storm. It helps low offshore manufacturing and reselling at higher prices due to "inflation" and higher interest rates.

And if all that doesn’t work out there’s 1.6 billion Chinese consumers to fall back on who’d love to have a real American product at Chinese prices.

China has many tariff zero export agreements with many countries.

BTW Ducati’s makeover involved moving production to Thailand.

Sure glad ARC spun off a while back and is the hands of an old ARC hand.

@cleeds Bain also owns Guitar Centers since 2007 and BRP Since 2003, Dominos since 1998, just to name a few and they have $150 billion dollar portfolio.

Not a fan of Bain or their track record. Like Carl Ichon they are pirates.

Mitt also came from money, as his father George was CEO  American Motors back in the day. 

Rich getting richer. 

@cleeds, No, I wasn't aware of Romney doing that but it's quite an unusual thing for him to do as his record is that of strip, dump and run shark.

All the best,
Nonoise

This is the business model that Mitt Romney made his fortune from. 

• Take over board by buying out members
• Take out loans and saddle company with debt
• Charge enormous fees for "managing" things
• Make it more efficient by cutting quality and downsize labor to pay interest on debt
• State your mission accomplished and leave company with debt so large they have to declare bankruptcy 
• Move onto next victim business

To think this used to be illegal a long time ago makes one wonder....

All the best,
Nonoise

 

What are the chances of them moving to Dallas?

I hope ejr1953 is correct.  I've owned 3 McIntosh integrated amps over the years and have been happy with them all.  Unless the naysayers have super golden ears, the blue meters are an attractive cosmetic touch but they are not a mask to cover inferior quality.

Expect McIntosh to be bust within 5 years.

Wrong they have been owned by PE several times.

PE is not always evil. Ducati was bought by Texas Pacific Group. They re engineered the entire line, made it profitable, got their multiplier and sold the company to Audi. Oh and won several MotoGP and WSBK titles and are kicking but in America.

Parts Authority in NY auto part’s owns a part of Rock Auto owned by PE and is the fastest growing independent auto parts group in America (coast to coast) .

So a few have had a bad experience my flight from New Orleans to Montréal sucked yesterday that mean I will never fly Air Canada again, think not.

PE is not always bad. Unless you are a communist and well not even then. the PRC owns all the US debit so they are PE and they are looking for ROI. 

 

Goatshead,

That is an unwarranted and cynical comment.  ejr1953 says it all.

In my work life I've worked for three companies that were sold to private equity and they seem to all follow the same playbook, 1) replace the top management with their own, 2) suck the cash out of the business and replace it with debt and 3) lots of outsourcing and employee terminations.

Having said that, if Highlander is in fact funding the acquisition with their own money and not borrowing to do so, this may actually benefit McIntosh as they expand.  If that's the case, it wouldn't surprise me that, after the expansion is well underway that Highlander sells their interest to "cash out".

If they are smart at Highlander (and they probably are), they realize that they've snagged a jewel of a specialized company with a great future and won't gut McIntosh for short-term gain.

Interestingly, Highlander does not use “other people’s money”. The partners bought Mac with their own money. So, *maybe*, they think about Mac & Sonus Faber a little differently than the average PE firm. And Mac is the longest-surviving luxury audio brand I can think of (I’m sure I’m missing something obvious) so why kill the golden goose? With no outside money, they can own as long as they want if it produces good cash flow

Highlander describes the companies as producing “functional works of art” - even the most avaricious exploitation of luxury products can take the path of “Veblen Goods” - the higher the price, the greater the demand (think Hermes). But the quality needs to be very high for that to work. So the value may not lie in cheapening the goods (the highest end luxury watch & jewelry co’s are all owned by p/e firms or enormously wealthy families. And even Hermes had to go public to raise capital)

One path would be to create clearer tiering of the product line at both companies (clear floor on pricing, more distinct tiers, creation of new “highest tiers”. Then, look for other people’s products to move through the distribution channels. And will definitely reorganize home entertainment to be a big business for both. And both probably need capital to rationalize design - ie there are probably 14 types of screws used to assemble a McIntosh chassis, because no one’s taken the time to figure out how to make it two

Or, they could fxck it all up

@wturkey 

I wish you were right!  It is far far worse than you think.

PE is an evil that is destroying business all around the world.    It cares nothing for the businesses it buys nor the people in them or the products they sell.  It is simple greed.

Using as little as possible real money, it maxxes the borrowing and puts it all in the target (McIntosh here).  It bleeds the business dry of investment and capital, extracting maximum interest, dividends and remuneration so as to treble or quadruple within a few years the small amount of money invested.  McIntosh then unsurprisingly fails, leaving a carcass to be picked over by other greedy feeders operating at a lower level in the food chain.

Expect McIntosh to be bust within 5 years.

By the way....There is a remedy for this.  Put a statutory limit on the amount of borrowings that can be used to buy a company.  Say 50:50 borrowing (funny money) and real money.

And while you are at it, kill off pre-pack liquidations that simply rob creditors and make offering business credit a dangerous occupation.

Yes, the business world is filled with evil.

“PE is looking for profit and a multiplier then dump. These guys will own them for 7 years max money in on 3-5. “

100%

They've lived through a lot of owners and survived unscathed. I think they'll be ok.

Private equity will look to “value engineer” costs down. 

Then the alternative is to close the business.

About 20 + years. 

PE is looking for profit and a multiplier then dump. These guys will own them for 7 years max money in on 3-5 

I'm surprised by the reactions - McIntosh has been owned by Private Equity prior to this transaction.

Just watch the YouTube build videos ,nice meters ,build quality vs value Waay over priced ,I have been into Loudspeaker modding personally myself, and knowing electronics and quality very well have owned a Audio store for 10 years ,

and working with Dan Modwright in the past know quality good or bad just by removing the cover , look at U.S made Coda for example of quality,and value,  much better built on every level  and 10 year warranty and very good sounding , but missing the pretty meters , I listen with my 👂 s,not 👁 👁 S !!

Like we need more nearly indistinguishable model numbers, with new ones--barely different--coming every year.

I'm surprised by the reactions - McIntosh has been owned by Private Equity prior to this transaction.

I don’t understand the negativity, McIntosh needs capital to expand. Quickest way to do that is to go to PE firm. If McIntosh can support its growth organically, it would have…but clearly it could not. So PE funding is a good alternative.

http://Highlander Partners announces acquisition McIntosh

ACQUISITION means buy/bought

I don’t understand the negativity, McIntosh needs capital to expand.  Quickest way to do that is to go to PE firm.  If McIntosh can support its growth organically, it would have…but clearly it could not.  So PE funding is a good alternative.  

Another link announcing the sale of McIntosh:

Highlander Partners announces acquisition McIntosh

"Jeff Poggi and Charles Randall, co-CEOs of the McIntosh Group commented, "We are thrilled to continue to pursue our growth trajectory alongside the Highlander team.  Across all brands and product categories we continue to see remarkable results and an excess of opportunity; we believe Highlander's financial approach and operational expertise can help seize these prospects".

"I’m not saying they’ll go back to 100% made in the USA of highest quality parts."

It's delusional to think any American  audio company is making 100% American made/sourced product and thriving. That model was extinct decades ago.

If anything, it will see Macintosh increasing the amount the amount of offshore practices in the manufacturing process. 

The new company is beholden to investors expecting nothing short of returns. When that fails we will see Mac passed to a Chinese investment firm paying BIG $$ for the name.

I hope I'm WRONG.