NHT's Happy Ending
On one level, of course, "acquisition" means that a company with money takes control of another company—one that needs money, most likely. In most cases, we assume (or, at least, I do) that both companies are more or less happy about this and that company A bought company B because it believes in its products and thinks it can make it profitable through extra capital or superior marketing acumen.
Sometimes acquisition can put together a company with a great product (such as, say, Stereophile) with a company with resources and an understanding of what its acquisition is attempting to do (such as, say, Primedia). That's not always the case, as my recent trip to Benicia, CA–based NHT illustrates. I'll give away the happy ending at the get-go: NHT was ultimately acquired by the Colorado-based Vinci Group, as you read here, back in October 2005. It turns out that didn't just happen by chance—or quickly.
First, I'll set the stage. NHT was founded by speaker-designer Ken Kantor and current managing director Chris Byrne in 1986. In the early 1990s, the company was sold to Jensen International. Jensen, in turn, was acquired by Recoton, which consolidated it into an audio group that included revered American brands Advent, AR (Acoustic Research), and Phase Linear, as well as European stalwarts Magnat and MacAudio. In 2003, NHT went to Rockford , which was best known for its automotive hi-fi products. It wasn't a match made in heaven, as it turned out, but it did save NHT from the ignominious fate of Advent, AR, and Phase Linear, which were euthanized after having been debased.
"What became apparent to me," Chris Byrne told me several days ago, "was that sitting around and hoping that someone who understood what we did would buy us simply wasn't a successful strategy. So I asked Rockford if we could take a little bit of control over the process. To their credit, they gave us a grace period in which we could do some maneuvering.
"We started searching for a corporation that shared our values—the most important one, from our perspective, was giving our customers insanely high-quality products for prices that were not insane. At least that's what we think we do.
"What came as a shock to several companies we talked to was that we were asking them the hard questions. 'Hey,' one CEO told me, 'we're supposed to be grilling you, not the other way around.'"
"Actually," said Andy Regan, NHT's senior VP of sales and marketing, "Chris talked to one high-end manufacturer whose products we respect very much, and it was obvious that the two companies had corporate cultures that didn't mesh, so he just walked away."
Ironically, it was Regan who put Vinci Labs and NHT together. "I was working with the Vinci Group, which actually manufactured many of the most respected digital and surround-sound controller products for high-end companies as OEM suppliers, and the company felt that the OEM market was limited in terms of growth. The board members thought it was time to manufacture its own line of high-end components. I said, 'You know, it's probably better to acquire a known name with a reputation for high-quality engineering rather than try to create a new identity, which could take a decade.'
"The board said, 'Okay, find us a fit!'"
That's why Regan attended the CEDIA exhibition in Indianapolis: He wanted to find a company he thought could burnish Vinci's luster—and vice versa. Being an audiophile, Regan was also shopping for a pair of speakers that his wife, Sue, would allow in the living room. He heard NHT's Xd system and noticed the company's Benicia address, an easy drive from his Napa home. "So I called Chris up one day and asked if they had the Xds set up there where I could audition them. He said they had a pair in their listening/dealer training room—and said I was welcome to visit them and check the Xds out."
"We were busy, as I recall," Byrne said, "so we just left him alone in the listening room and pretty much forgot about him. A couple of hours later, Andy came into my office and asked how big a check he'd have to write for a set of Xds. I told him, and pretty much as an afterthought, I said, 'We're kind of in a hurry to find someone to purchase us, in case you know anybody who's looking to buy a speaker company.'
"Andy got a strange expression on his face and said, 'Funny you should mention that.'"
Regan added, "We were both stunned at what a good fit NHT and Vinci were. The Xd project needed extremely refined digital engineering and that was Vinci's bread and butter—and NHT's emphasis on good acoustic engineering and the fact that it actually had a solid business plan made it even more attractive. It didn't take long to put together a deal."
"That's true," Byrne allowed. "but before we took it to that stage, I had to interview the company that would buy us—and they passed. Then I told them I intended to poach one of their best employees."
Regan left his job as vice president of sales and marketing for Vinci Labs to become senior VP at NHT. "He fit into our corporate culture," Byrne joked. "Nearly everybody in the front offices plays at least one instrument and Andy, as a former roadie (Regan was a professional FOH engineer for many rock acts during the 1970s, including Stereophile favorite Little Feat), knows how to plug everything in."
How good a fit is NHT with Vinci? While I was at NHT, I saw pre-production models of new NHT electronics, which were designed jointly by NHT engineer Jack Hidley, visual design manager Bob Hopkins, and the Finnish digital engineers for Vinci Labs. The first two components are the $2700 Controller and the $2000 five-channel 200Wpc Power5 power amplifier. They sounded extremely good; sported clean, curved anodized faceplates, unencumbered by busy knobs and dials; and featured innovations like an Ethernet bus system that allows extraordinary control of the system, down to individually monitoring the performance of each channel.
NHT and Vinci seem to be a perfect fit—and the future for both seems brighter than the Benicia sunshine. See, I told you this story had a happy ending.