Who bought ARC?

February 2007

Minnesota-based audiophile electronics manufacturer, Audio Research, accounted yesterday that they have been sold to Quadrivo SGR – the private equity firm that owns loudspeaker manufacturer Sonus Faber. Financial details were not reported for the deal but reportedly the asking price was between $1,000,000 and $2,000,000 for the company.

Founder, William Z. Johnson, will step down after 38 years of running the company but will still be involved in some design decisions. The remainder of the management team will remain in tact going forward.

It seemed evident that Audio Research will remain true to its audiophile heritage. The question of whether the new ownership would invest in bringing Audio Research into the world of multi-channel home theater was not answered in the release.

At $ 2 million it was a steal, hope he got cash and a long consultant contract.

That does not seem right.
I'm sure Audio Research is worth much more then that.
I could not find any article that disclosed the financials of that sale.

The price is misleading; since it was a tube amp company they are obviously being paid in 1965 dollars.

The omission in the press release (no home theater stuff) might be the reason the company was sold for the range indicated. Their customer base is aging (like me) and is not being replaced fast enough. What are their annual sales? That would give a better indication as to the fairness of the deal.

Hey Mr. ARC owner, we've got a deal for you.

- don't worry about payroll or daily operations anymore
- we'll hire your management team
- well give you $150K for 3 years to look over designs and if we have questions
- well give you $2M now

doesn't look so bad when you look at it like that.

.......plus assumption of debt (and the costs of new building done 10? years ago) etal.

plus an agreement to retain all staff.

plus an agreement to maintain parts and provide service for all ARC products made.

I just hope the new guys understand the value of email!

From my insider info, ARC is one of the selected few companies who do not have to worry about their future. Their latest range of products - CD-3, 7, Ref-3, LS-26 - has been hugely succesful (Ref-3 is the time best selling model in ARC 40+ years history) which made their financial standing exemplary, not only by hi-end standards.

If it is true, one or two million for the purchase of ARC seems ridiculously cheap for such a well established & prestigous company. It is good that the new owners will retain alot of the old employees but the question arises as to why it was up for sale in the first place. As mentioned above, maybe because Audio Research failed to enter the Home Theater market?

Maybe it's as simple as the owner retiring and cashing in his chips. Lots of successful manufacturers have ignored home theater. JRDG has even ignored digital.

Why so cheap? Maybe so he could dictate terms and protect his employees.

The sale price was never confirmed - it is a rumor.