VOXX International confirmed the purchase of Directed Electronics including all vehicle security, remote start and telematics brands for a cash price of $11 million plus certain liabilities, effective July 2.
Specifically, VOXX announced it acquired the aftermarket remote start and security systems and connected car solutions businesses of Directed, LLC and Directed Electronics Canada Inc. The company said, “The cash purchase price is $11 million and the assets the Buyer acquired include inventory, accounts receivable, IT systems, intellectual property (which includes patents, trademarks, domain names, and copyrights), plus certain fixed assets.”
The new company will be called VOXX DEI LLC and will be 75 percent owned by VOXX and VOXX DEI Canada, as a subsidiary. The remaining 25 percent is expected to be owned (under a soon-to-be-completed agreement) by Nutek Corporation. In exchange for 25 percent of the newly formed subsidiary, Nutek will assume approximately $4.2 million in trade payables and claims, and certain obligations in Canada related to retention of employees and real estate leases.
VOXX said in a news release it believes the purchase of Directed “should generate more than $10 million in cash within the next two quarters.” It added, “This transaction is expected to add ~$50 million in net sales on an annualized basis, provided there is no further deterioration in the economy due to the global pandemic.”
Directed has been VOXX’s primary competitor in the North American remote start business for years and, to a lesser extent, the same is true in the connected car segment (telematics), said VOXX. “Now, the combination of assets provides VOXX with a stronger offering for its customers, while also expanding its distribution network. Further, the addition of Directed’s top-tier engineering team will help drive innovation as it brings together the best engineering talent in the industry,” it said.
Pat Lavelle, President and Chief Executive Officer of VOXX International Corporation stated, “I have known the Directed team for years, having competed against them at every turn, and we could not be happier in adding their brands, customers and team to the VOXX family. This is a natural fit for both companies…The engineering talent we are adding is exceptional and we already see areas for cross-over, sharing best practices and leveraging their skill sets for other technology breakthroughs.”
Details of the new VOXX DEI LLC were explained by Aron Demers, Senior VP VOXX Electronics, in a separate letter to dealers that was posted online this week. He said there will be no changes to tech support. Most of Directed’s technical service and support representatives have been retained by VOXX to help with phone support and in-field visits. Their contact information remains the same.
Directed sales executives Al Fontane (VP of US Sales) and Alan Birce (VP of Canada Sales) are now at VOXX. Also retained by VOXX are Directed sales managers; Dana Christensen (Western Canada); Patrick Virock (Minnesota market); and Michael Daily (Texas market).
Directed’s Geoff Weathersby and his team also move to VOXX to manage all connected car initiatives.
On the VOXX executive side, Joe Dentamaro (VP Voxx Security/Telematics/ADAS) and Demers will oversee the newly combined business.
Directed’s Brittany Wozniak will join VOXX as Account Coordinator, taking dealer orders on Directed products. She will work under Patty Ferrari who manages the VOXX internal sales team.
From July 1- July 8, VOXX will move inventory from Directed’s Vista, CA headquarters to VOXX’s Nevada warehouse and from Directed’s Memphis warehouse to VOXX’s Virginia warehouse. “We expect to be shipping from Nevada and Virginia on July 9th. All backorders, open orders, and RA’s will be moved to the VOXX system once the DEI warehouses stop shipping on June 30th,” said the letter.
Current VOXX customers can add Directed products to any new VOXX purchase order.
Directed owns eight brands, led by Viper®, along with Autostart®, AstroStart®, Automate®, Avital®, Clifford®, Directed®, and Python®. VOXX now owns these brands along with Directed’s accessory lines.
VOXX also said the purchase, “brings Directed’s market-leading Vehicle Control Platform, which provides subscription-based revenue and the potential to expand into enterprise and fleet B2B markets.”