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mauidj
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Krell sold to Private Equity firm?

I have just read that Krell has been sold to a private equity firm.
While some say that Dan D'Agostino will remain as chief designer, my recent visit to their website shows that all reference to Dan has been removed. He does not even get mentioned in the "History" section.
Krell was Dan and without him I fear for the company and it's products.
It seems like a really bad public relations move to completely eradicate all reference to the man who built the company from scratch and designed most of it's groundbreaking products.
I hate the whole concept of these Private Equity takeovers and the way these new guys are handling it indicates that this will be another bad move for all concerned.
They probably know jack shit about audio and care even less. They sure don't give a damn about the legacy of this great brand.
I have know Dan for a while....just as a customer...but he has always been available and ever so helpful whenever I have needed something.
It could be time to sell my EVO system as I know that the personal service I so loved will no longer be available. And, if as I fear Dan is not designing the products then you can stick a fork in them. They're done
I just hope that I am proved wrong.

ncdrawl
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Re: Krell sold to Private Equity firm?

I read on another forum that Dan D'Agostino has been forcibly removed from his own offices (by law officials) under the instruction from the rest of the Krell Industries board over his constant and often disruptive 'exchanges' with his ex-wife that has been detrimental towards the company

Ajani
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Re: Krell sold to Private Equity firm?


Quote:
my recent visit to their website shows that all reference to Dan has been removed. He does not even get mentioned in the "History" section

Actually he is mentioned in the History section:

http://www.krellonline.com/history.html

"1980
Krell is founded by Dan and Rondi D'Agostino"

mauidj
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Re: Krell sold to Private Equity firm?

Sorry....I stand corrected.

Although it is hidden under Benchmark Products.
It certainly is not mentioned in either of the main texts on the subject.

Ajani
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Re: Krell sold to Private Equity firm?


Quote:
Sorry....I stand corrected.

Although it is hidden under Benchmark Products.
It certainly is not mentioned in either of the main texts on the subject.

Other than that, you are right that Dan's name and picture is surprisingly absent from the Krell website... I remember not too long ago seeing his Face and name all over the site...

Grosse Fatigue
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Re: Krell sold to Private Equity firm?

This is a bad call. They should have removed the ex wife forcibly from the company. Anyway, always separate your business from your private life. Never bring your wife to work for you or as a partner. Draw the line -legally. He was Krell. They are nobody without him.

dbowker
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Re: Krell sold to Private Equity firm?

Sucks all around and as a fan and owner of Krell gear I can't feel good about the long term prospects of the company. Still, I always heard Dan was wound pretty tight and as is the in many areas of life, you don't address your personal problems and they will being you down. Working with a spouse is only a faster way to make it happen (maybe). On the other hand, talk about a MAJOR weakness in companies like this- having the whole show's lynchpin in ONE guy! Like when Steve Jobs was out of the picture at Apple for like nine months and their stock was all over the place, mostly tanked, and then he's back it it's all good with the world again! That guy dies and Apple goes into a black hole. Krell can roll a while with what it has- they move slowly and incrementally anyway. But confidence will already be shaky to none, and then what?

Monty
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Re: Krell sold to Private Equity firm?

After a brief period of not competing with Krell, he will probably surface again under a new name and doing the same stuff. That's usually how this stuff works out.

dbowker
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Re: Krell sold to Private Equity firm?

Good point. If a man is a company, where he goes, customers will too. I'm betting that "brief" time may be more like a number of years though, due to non-compete clauses. HATE those things!

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Re: Krell sold to Private Equity firm?


Quote:
Working with a spouse is only a faster way to make it happen (maybe)...

The long-term success of Krell was due to Dan - see http://www.stereophile.com/interviews/1203dagostino/ - and his then-wife Rondi - see http://www.stereophile.com/features/722/index1.html - working as a team. Dan was designer and chief engineer, Rondi ran the company. The two dovetailed very well.

Two things happened in the past few years. First, Dean Roumanis died - see http://www.stereophile.com/news/080706roumanis/index.html - and Dean had played a major role in determining the company's strategic direction. Second (and less significantly in my opinion), Dan and Rondi divorced, both remarrying. From the outside, they appeared friendly enough. I had a conversation at the 2007 HE Show with Dan and Rondi, where they were later joined by the new spouses.

But yes, it is difficult to envision Krell without Dan at the helm.

John Atkinson
Editor, Stereophile

dbowker
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Re: Krell sold to Private Equity firm?

Perhaps "ex-spouse" I should have said. Friendly in public is one thing, in the day-today stress and management of a company is another. There is enough room in any business relationship for it to get overly personal; after a divorce I can't see anyone NOT having a hard time with it. I know I would! Anyway- in a few years perhaps we'll be seeing another great company emerge with a campy sci-fi moniker.

mauidj
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Re: Krell sold to Private Equity firm?


Quote:
Good point. If a man is a company, where he goes, customers will too. I'm betting that "brief" time may be more like a number of years though, due to non-compete clauses. HATE those things!

I agree, and if this PE company is like most, the clause will be long and very detailed.
However I do hope that sooner rather than later he will emerge as the head of a new and exciting company devoted to furthering the High End audio business.
I remember when Nelson Pass left Threshold. I lamented only to see him return stronger and re-energised. Introducing a new brand that was even better than the last.

Like Dan, Nelson is another visionary who relishes his place in our hobby and is always available to his customers.
Threshold has faded into obscurity without him as will Krell without Dan.

Looked at through those glasses, I foresee a bright future and even more interesting products coming from Mr. D'Agostino.
Meanwhile I will continue to thoroughly enjoy my Krell EVO gear, as I am doing right now, while awaiting further developments with much anticipation.

Orb
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Re: Krell sold to Private Equity firm?

Any idea who owns the IP-patents of the Krell products?
Just wondering if some are in his own name, although good chance they are not.

It would be great if he makes a come back with the same strength as say Nelson Pass, just wondering if he will need to come up with a totally new design for amps, or different enough to that of current Krell products.

Cheers
Orb

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Re: Krell sold to Private Equity firm?

I think that Monty and mauidj got it right. Think about Mark Levinson who, after founding Mark Levinson Audio Systems, went to Cello, then to Red Rose and has now just launched Daniel Hertz. A non-competition clause cannot make it impossible for somebody to earn a living working at his craft.

RobertSlavin
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Re: Krell sold to Private Equity firm?

Dan and Rondi D'Agostino have apparently sued the equity company that forced them out of Krell. Here is the hot story that appeared on December 1 on the web: http://www.twice.com/article/391301-Krell_Founders_Sue_Equity_Fund_To_Return_To_Company.php

Toussaint

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Re: Krell sold to Private Equity firm?

apparently this equity group does not know the audio business very well. If Dan and Rondi did not win out in this situation... and somehow word got to to shun the old company, then just about everyone in the audio world - would do exactly that.

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Re: Krell sold to Private Equity firm?


Quote:
Dan and Rondi D'Agostino have apparently sued the equity company the forced them out of Krell. Here is the hot story that appeared on December 1 on the web: http://www.twice.com/article/391301-Krell_Founders_Sue_Equity_Fund_To_Return_To_Company.php

Toussaint

That's a very interesting article. I'd love to see Stereophile do an expose on this situation.

mauidj
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Re: Krell sold to Private Equity firm?

Well this certainly reinforces my dislike of Private Equity firms and my fear that this one in particular cares less and knows nothing about the Audio business.

It also seems that JA's comments regarding Dan and Rondi's continuing good relationship is well founded. And that the rumors regarding them is simply malicious gossip probably put out by KP lackeys.

I guess all we can do is hope and pray that the law suit instigated by the D'Agostinos is successful. To lose the company you founded and nurtured for so many years to a bunch of money grabbers must be heartbreaking.

I look forward to a happy and positive resolution to this sad tale.

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Re: Krell sold to Private Equity firm?

mauidj:

you can look forward to a happy solution, but i have to tell you that once a company gets involved in the american legal system to the degree this one is, there are seldom happy endings. even if the court returned the company to the status anti, it would never be the same. i expect it will be broken into yet smaller pieces. while this is going on, no one is concentrating on the core business and the ship is rudderless. with so many well-known audio companies dropping out in this recession, it will be terrible to see one more go.

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Re: Krell sold to Private Equity firm?

Wow- well that certainly sheds some sinister light on the situation. I take back everything I said about the personal getting in the way of business. Obviously it's dirty business on the part of KP getting in the way of fair play and ethics.

Ajani
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Re: Krell sold to Private Equity firm?

Gentlemen, let's keep in mind that we don't know the full story or even whether either of the accounts of why Dan was removed is true...

It could just be corporate greed or it could have been bad company morale, or 100 hundred other reasons or even a combination of the 1st two... We honestly don't know, so it's too early to be ready to boycott the new Krell...

The result of this move could even be 2 companies both producing excellent Gear... Maybe D'Agostino would finally be willing to start a company with his name on it (rather than a scifi moniker)... So we'll all just have to wait and see what happens...

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Re: Krell sold to Private Equity firm? *DELETED*

Post deleted by andy_c

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Re: Krell sold to Private Equity firm?


Quote:
Here is the latest development on this.

Huh? That's the same link posted by Toussaint on the previous page....

Orb
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Re: Krell sold to Private Equity firm?

Interesting to read the submitted comment that allegedly looks to be from Dan's wife.

Quote:

This article is true. Ling Kwok of KP Capital Partners, made an investment in Krell for a minority share. KP/Ling Kwok did not pay the D'Agostino's for the shares. KP's role was to help manage Krell financially. KP Capital/Ling Kwok deceived the D'Agostino's and violated the contract for their own enrichment. Neither D'Agostino has been involved at Krell since Sept 1, 2009.
Petra Wilde, wife of Dan D'Agostino


Using the word allegedly as it cannot be proved by me either way.

You know, I wonder if Ling Kwok got the idea from watching Meet Joe Black, quite unbelievable whats happening at Krell or more specifically to Dan and Rondi
I would assume the company to them is like their child and this must be gut wrenching to go through.

Cheers
Orb

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Re: Krell sold to Private Equity firm?


Quote:
Huh? That's the same link posted by Toussaint on the previous page....

My apologies. I think I just did some dumbass thing like clicking on the last page indicator of the thread, rather than the thread title. Anyway, I deleted the post.

Orb
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Re: Krell sold to Private Equity firm?

In your defense though Andy, there is now a comment at the bottom that was not there when initial link was posted from someone related (looks to be anyway) to what is happening.

If you had not reposted the link I would had missed the comment and sure others would as well

Cheers
Orb

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Re: Krell sold to Private Equity firm?

> KP/Ling Kwok did not pay the D'Agostino's for the shares.

Does anyone understand this? Does it mean that an agreed sum was not transferred or that KP was going to provide compensation in some other form?

Does anyone know the motivation for the original deal? For example, was Krell up to their eyeballs in debt?, the founders wanted to fund an expansion/change of direction?, the founders wanted to shift some money into their personal accounts because of the separation?, etc...

RobertSlavin
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Re: Krell sold to Private Equity firm?

The story was updated on December 3. It now explains that the equity firm is countersuing and it has an interview with the former COO and now President of Krell. In the interview the president offers his opinion of the matter and his plans for Krell. The story also specifies other personnel changes.

Toussaint

Editor
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Re: Krell sold to Private Equity firm?

Quote:


Quote:

"KP/Ling Kwok did not pay the D'Agostino's for the shares."

 

Does anyone understand this? Does it mean that an agreed sum was not transferred or that KP was going to provide compensation in some other form?

 

Generally, when money doesn't change hands, equity is traded for debt.

John Atkinson
Editor, Stereophile

Monty
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Re: Krell sold to Private Equity firm?

What I found unusual was in the Private Equity Firm getting more board seats even though they were the minority shareholder. Something just doesn't smell right with that and I'm inclined to consider that the PEF entered the arrangement in bad faith. I could be wrong, of course.

Denver Mortgage
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I'm a little late to the discussion

It seems that this takeover of Krell left a lot of confusion about the direction of the company. Are Krell products being made in China?

soulful.terrain
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makin money

[quote=mauidj]I have just read that Krell has been sold to a private equity firm.
 

I hate the whole concept of these Private Equity takeovers and the way these new guys are handling it indicates that this will be another bad move for all concerned.
They probably know jack shit about audio and care even less.  quote]

 

 Response:

.."I hate the whole concept of these private equity takeovers.."

Are you saying Krell was stolen from Dan?  No, it was sold.

This is how business works and I'm sure Dan D. did just fine, if he hadn't, he would not have had the capitol to finance his new line of Momentum amps such as this one for a cool $42,000:

Private equity comes from private investors taking a risk on a particular product. This is something the anti-business left fails to understand. And God forbid they make a profit.

 

 

JoeE SP9
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private equity

Unfortunately "private equity" ownership usually means loss of vision for a company. In a couple of years those same private equity investors after milking a cash cow for all they can will be selling a company that is nothing but a memory of what Krell once was. I've seen it happen all too often.

jgossman
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Non-sense

It's an old story now.  Had anyone considered that either a:  Dan D had fostered his company from little audio shop to join McIntosh and Audio Research as one of the preeminant American brands and just wanted a change and this was the best way for it to happen OR b:  Dan D brought in many many people over the years who were part of that vision and that Dan D was an insufferable asshole who had to go lest the company be lost (as in Apple circa the late 80's and Jobs) OR c:  some combination of a and b that allowed someone(s) with a love of audio AND a lot of money to come in and make the company better at business?

Some years on now, Krell is doing very well and so is Dan D.  So it seems to have been a win win for the industry.

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