VOXX International Corporation Announces the Sale of Certain Assets of its Domestic Accessories Group to Established, Inc. for Approximately $25 Million

Rhea-AI Summary

VOXX International (NASDAQ: VOXX) has announced the sale of certain assets of its Domestic Accessories Group to Established, Inc. for approximately $25 million. The deal includes the iconic RCA® trademarks and other intellectual property. VOXX will continue to operate as VOXX Accessories Corp. (VAC) to ensure business continuity. The transaction, expected to close by August 30, 2024, aligns with VOXX's strategy of monetizing assets, realigning the organization, and paying down debt. CEO Pat Lavelle stated that this move will strengthen the company's financial position while maintaining strong global brands and distribution.

Positive

• Asset sale expected to generate approximately $25 million in revenue
• Strengthening of financial position through debt reduction
• Continuation of business operations as VOXX Accessories Corp.
• Maintenance of strong global brands and distribution

Negative

• Divestment of iconic RCA® trademarks and other intellectual property
• Potential reduction in domestic market presence in the accessories business

Insights

Financial Analyst

VOXX's $25 million asset sale represents a significant financial transaction at approximately 15% of the company's current $169 million market capitalization. This cash infusion directly addresses the company's stated priority of debt reduction, which should strengthen the balance sheet and potentially reduce interest expenses.

The strategic divestiture of certain domestic accessories assets, including the RCA trademarks, allows VOXX to monetize intellectual property while maintaining operational continuity through VOXX Accessories Corp. This transaction creates immediate liquidity without disrupting core business operations or customer relationships.

For investors concerned about VOXX's financial flexibility, this move signals management's commitment to streamlining operations and improving the company's debt profile. The timing is practical, with the deal expected to close by August 30, 2024, providing near-term financial strengthening.

This transaction represents a targeted approach to improving VOXX's capital structure rather than a wholesale business division sale, as evidenced by the continuation of operations under VAC. The financial benefits of reduced debt service costs should begin materializing shortly after the transaction closes, potentially improving cash flow flexibility for future strategic initiatives.

Corporate Strategy Expert

This asset divestiture aligns perfectly with VOXX's articulated three-pronged strategy: monetizing assets, organizational realignment, and debt reduction. By selling specific intellectual property assets while preserving operational capabilities, VOXX is executing a selective pruning rather than abandoning its accessories business entirely.

The decision to maintain operational control through VOXX Accessories Corp demonstrates a thoughtful transition strategy that prioritizes business continuity and stakeholder relationships. This approach helps preserve customer and supplier relationships while extracting capital value from underutilized or non-core assets.

Notably, CEO Pat Lavelle emphasized that VOXX will maintain strong global brands post-transaction, suggesting this divestiture focuses on domestic-specific assets while preserving international capabilities. This indicates a geographic refinement of their business portfolio rather than category abandonment.

The $25 million valuation suggests these assets held meaningful value, but management has determined their strategic worth is maximized through monetization rather than retention. For a company holding approximately 30 brands as mentioned in their corporate description, selective portfolio management demonstrates disciplined capital allocation and strategic focus on higher-performing segments or regions.

VOXX will continue to operate as VOXX Accessories Corp. ("VAC") to ensure business continuity

ORLANDO, Fla., Aug. 8, 2024 /PRNewswire/ -- VOXX International Corporation (NASDAQ: VOXX), today announced that it has entered into an Asset Purchase Agreement (the "Agreement") to sell certain assets, including the Company's iconic RCA^® trademarks and other intellectual property, to Established Inc. The total value of the transaction is expected to be approximately $25 million, and the companies anticipate the deal will close on or before August 30, 2024. Under the agreement, VOXX Accessories Corp. will continue to operate the business while working with customers and partners in the normal course of business.

Pat Lavelle, Chief Executive Officer of VOXX International Corporation stated, "This transaction is in line with our stated strategy of monetizing assets, realigning the organization and paying down debt. We have enjoyed strong market positions and success in the accessories business globally, and will maintain strong global brands and distribution once this transaction closes. Domestically, while we are selling assets, we will continue to provide our customers and manufacturers with the same support as they have had in the past, as we are continuing to manage the business. With this asset sale however, we will strengthen our financial position."

The Agreement was entered into on August 2, 2024 and the companies anticipate the transaction will close on or before August 30, 2024. The finalization of the Agreement will be subject to standard closing conditions.

About VOXX International Corporation
VOXX International Corporation (NASDAQ: VOXX) has grown into a worldwide leader in the Automotive Electronics and Consumer Electronics industries. Over the past several decades, with a portfolio of approximately 30 trusted brands, VOXX has built market-leading positions in in-vehicle entertainment, automotive security, reception products, a number of premium audio market segments, and more. VOXX is a global company, with an extensive distribution network that includes power retailers, mass merchandisers, 12-volt specialists and many of the world's leading automotive manufacturers. For additional information, please visit our website at www.voxxintl.com.

Safe Harbor Statement
Except for historical information contained herein, statements made in this release constitute forward-looking statements and thus may involve certain risks and uncertainties. All forward-looking statements made in this release are based on currently available information and the Company assumes no responsibility to update any such forward-looking statements. The following factors, among others, may cause actual results to differ materially from the results suggested in the forward-looking statements. The factors include, but are not limited to the risk factors described in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended February 29, 2024, and other filings made by the Company from time to time with the SEC, as such descriptions may be updated or amended in any future reports we file with the SEC. The factors described in such SEC filings include, without limitation: impacts related to the COVID-19 pandemic, global supply shortages and logistics costs and delays; global economic trends; cybersecurity risks; risks that may result from changes in the Company's business operations; operational execution by our businesses; changes in law, regulation or policy that may affect our businesses; our ability to increase margins through implementation of operational improvements, restructuring and other cost reduction methods; our ability to keep pace with technological advances; significant competition in the automotive electronics, consumer electronics and biometrics businesses; our relationships with key suppliers and customers; quality and consumer acceptance of newly introduced products; market volatility; non-availability of product; excess inventory; price and product competition; new product introductions; foreign currency fluctuations; and restrictive debt covenants. Many of the foregoing risks and uncertainties are, and will be, exacerbated by the War in the Ukraine and any worsening of the global business and economic environment as a result. 

Investor Relations Contact:                                           
Glenn Wiener, GW Communications (for VOXX)                              
Email: gwiener@GWCco.com

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SOURCE VOXX International Corporation

FAQ

What assets is VOXX International selling to Established, Inc.?

VOXX is selling certain assets of its Domestic Accessories Group, including the iconic RCA® trademarks and other intellectual property, to Established, Inc.

How much is the asset sale worth for VOXX (NASDAQ: VOXX)?

The total value of the transaction is expected to be approximately $25 million.

When is the VOXX asset sale expected to close?

The companies anticipate the deal will close on or before August 30, 2024.

Will VOXX continue to operate its accessories business after the sale?

Yes, VOXX will continue to operate as VOXX Accessories Corp. (VAC) to ensure business continuity and support customers and manufacturers.