Klipsch Audio Executing a Global Strategy
Private equity funds and venture capital firms have invested in several of the vendor groups written about in this report, but with VantagePoint Venture Partners, Klipsch Audio Inc. possesses a high-powered minority shareholder with vast information resources, and the companies work together closely to execute a mutually agreed-upon strategy.
VantagePoint first began pursuing an investment strategy for the digital media market in 2002. It "incubated" a portfolio company called Aurora Inc., founded by John Carter, former chief engineer of Bose Corp., and Tom Jacoby, former CEO of Harman Consumer Group, to help VantagePoint refine its strategy and select a company in which to invest.
Aurora and VantagePoint selected Klipsch after a year-long process. "We spent many months looking at many companies, then selected Klipsch and worked with Klipsch very proactively," says Cynthia Ringo, managing director and co-head of the firm's Communications & Systems Practice. According to Ringo, VantagePoint saw opportunity in consumer audio created by the shift from analog to digital, video's market pull of audio, audio's increasing portability and the related and rapid growth in custom installation.
Klipsch announced the VantagePoint stake on February 15, the same day it announced its acquisition of privately-held Danish speaker company Jamo. Ringo and VantagePoint Vice President Rich Davis now sit on the Klipsch board, while Carter and Jacoby are now on the Klipsch payroll as chief technology officer and chief development officer/vice chairman, respectively. With the Jamo acquisition, Paul Jacobs is now president of Klipsch LLC (dba Klipsch Audio Technologies) and also Jamo Acquisition, the subsidiary that holds Jamo's U.S. and international businesses.
Jacobs says that when VantagePoint first approached Klipsch, the venture capital firm's strategy was already largely in sync with that of Klipsch. Both saw the opportunity for a multi-branded consumer audio company with good, diversified distribution around the world.