Klipsch Acquires Mondial Designs; Move Bodes Well for Both Parties

One of the oldest names in American audio is venturing into new territory. Indianapolis, IN–based Klipsch Audio Technologies has acquired "selected assets" of privately held Mondial Designs Ltd. of Dobbs Ferry, NY, maker of the Acurus and Aragon brands of amplifiers, preamps, and signal processors. Paul Rosenberg, Mondial's co-founder and former vice president, will become a director at his new parent company, with primary responsibilities in marketing and product development for Acurus and Aragon. Mondial chief engineer Adam Gershon and senior engineer Michael Kusiak will also remain with the company. Anthony Federici, Mondial's president, has moved on to form a new company called D & A Labs, which plans to debut a "high-end home theater receiver" this spring, with other quality electronics to follow.

The sale of Mondial to Klipsch, and Federici's departure, were accomplished amicably and are in the best interests of both companies, according to both Federici and Paul Jacobs, Klipsch's executive vice president and chief operating officer for the Klipsch Worldwide Products Group. "We have enjoyed a terrific relationship with both Anthony and Paul," said Jacobs, noting that Mondial products were displayed at CES 2001 under the Klipsch banner.

"We found a tremendous commonality with Acurus and Aragon and the direction we want to take at Klipsch," Jacobs explained. "We were looking for a platform to launch the Klipsch brand into the upscale home theater and home automation markets, and some of the talent at Mondial was a perfect fit." Among Gershon and Kusiak's new projects will be a redesign of the Acurus Act III surround processor, which may make its official bow at the next CEDIA show in the fall. Klipsch hopes to bring out "six or seven" new amplifier models—including a flagship design, the Palladium monoblocks.

Klipsch also wants to make a strong move into the digital loudspeaker market. The company's V-2 400 THX multimedia sound system "has not only won universal praise from computer journals, but has introduced a whole new generation to quality sound," Jacobs stated. "Viral marketing is the key to making this industry grow."

Founded in 1946, Klipsch manufactures loudspeakers for the home audio and home theater markets, which account for 25% and 45% of the company's annual business respectively. Multimedia products makes up another 20% of Klipsch's business, with pro audio comprising the remaining 10%. The acquisition of Mondial Designs may shift those numbers even more into the home audio and home theater categories.

Both Federici and Jacobs agreed that Acurus and Aragon enjoyed excellent sales, enthusiastic owners, and loyal dealers, but Mondial had difficulty keeping up production. Klipsch's deeper resources will be applied to bring production levels up to a quantity sufficient to supply all existing dealers, as well as to equip new ones. Toward that end, Jacobs will push production inventories up to three times the level they were previously, and has asked all parts suppliers to do likewise. Service for all Mondial products is also a priority. "It's our intention that all Acurus and Aragon owners and dealers benefit from continuous availability of parts and service," he said. Federici concurred, expressing "a genuine belief that Klipsch will take care of all Acurus/Aragon dealers."

The acquisition of his former company was done "on a very friendly basis," Federici mentioned. He was not even asked to sign a non-compete agreement, a common practice in such circumstances. Federici believes that with Klipsch's support, Mondial products will reach previously unattainable numbers of new customers. As he and Paul Jacobs see it, this buyout looks like a winner for all involved.