ATI Buys Theta Digital

Theta Digital, the "Digital Done Right" pioneer of separate DACs and transports, has been sold to Amplifier Technologies, Inc. ATI has pledged to immediately begin work on selected Theta audiophile and home-theater products.

"We have long admired Theta for its stature in the industry and we look forward to providing Theta with ATI's extensive resources," stated ATI president Morris Kessler in an announcement released November 15. "Our goal is to strengthen Theta's continuing commitment to providing state-of-the-art products."

Kessler, who owned the fabled SAE company in the 1960s and 1970s, has over 40 years' experience overseeing the design, engineering, and manufacturing of audio components. Currently, ATI produces up to 1000 OEM products a month for a host of well-known companies, as well as 23 of its own amplifier and three A/V processor models.

The sale is welcome news to frustrated Theta customers who have been wondering why the company has lagged so far behind. Theta has issued nothing new since January 2007, when it announced an upgrade to the Citadel monoblock power amplifier, and the Premium DAC card for the Casablanca III Music and Cinema Controller. The Theta Generation VIII DAC-preamp, acclaimed on its January 2003 release as one of the finest DACs on the market, has never been upgraded to decode high-resolution SACD data, or to accept a USB input. (Stereophile has not auditioned the Gen.VIII for so long that it has been dropped from our "Recommended Components" list.) Both the Carmen II DVD/CD transport (released August 15, 2002) and Compli multiformat DVD player (released September 2003) are no longer in production, leaving the pioneer of outboard DACs without a companion transport. The company that "shuns obsolescence" and assures customers that its products are "updateable and upgradeable" has, of late, come up short.

Theta's longtime general manager, Dave Reich, will remain with the company, and director of quality control Naomi Seeger will retain her position as Theta's golden ears. "Theta's acquisition by ATI provides us with enhanced engineering and financial strength that will enable Theta to develop new, innovative products," says Reich. "Theta is committed to the high-end market, which we have helped define for the last 20 years."

"We understand Theta's importance in the industry," longtime ATI spokesperson and Kessler associate Mike Pontelle told Stereophile. "We intend to honor the heritage of their products while bringing financial stability and increased resources to the company." While Theta's products will continue to be manufactured in the US, as are ATI's, and Theta's headquarters will remain in Agoura Hills, California, some elements of Theta's administration will shift to ATI's headquarters in Montebello, 40 miles away.

ATI has identified several critical issues that demand immediate attention. "Our first order of business is to focus on the Casablanca," says Pontelle. "We also expect to release the Virtu, a pure class-D digital amp (footnote 1) and the less costly Valis digital-to-analog processor, by the end of the second quarter. All [of] Theta's amplifiers are well accepted, up to date, and reliable, so we'll leave those alone for now. We will also honor all Theta warranties."

Footnote 1: Theta first announced the Virtu at the CEDIA Expo in September 2005. The company's so-called PowerDAC was never released.