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Curt Palme
CRT Tech
Joined: 08 Mar 2006
Posts: 24396
Location: Langley, BC
TV/Projector: All of them!
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| Posted: Sat Sep 19, 2009 4:36 am Post subject: Another conglomerate bites the dust... |
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From the avs forum:
Nortek, the parent company of brands such as Sunfire, Panamax, Speakercraft, Xantec, Furman, Litetouch, Omnimount, Niles, Elan and other AV marks, announced yesterday at the CEDIA tradeshow in Atlanta that they would be filing for Chapter 11 Bankruptcy protection. The news came via a press release.
Nortek along with the likes of Planar, D&M Holdings and some private equity companies had been snapping up AV companies back before banks started getting stingy. Flush with funny money, buying companies from their founders was easy back in the day. Running them as and serving both the dealer base as well as the customer base has proven to be a whole other issue for AV industry consolidators, especially in these tough economic times.
Nortek is selling the concept that they are flush with cash despite the bankruptcy and that things will remain the same as before. Clearly, that wasn't good enough to become profitable in these difficult times. To survive Nortek will need to invest in new products, new concepts, become a better marketing company that doesn't rely on the lift from PR exclusively for product momentum if they have hopes of coming out of their problems looking and smelling good. What's more likely is Nortek looking to spin off some of the brands they gobbled up to raise even more cash so that they become more of a lean operation. Don't be shocked when more than one of the brands potentially goes on the block at deeply discounted prices. Jeremy Burkardt could buy back Speakercraft or Bob Carver could buy back Sunfire without me falling out of my Aeron chair out of shock.
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Sat Sep 19, 2009 4:43 am Post subject: |
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Not going under...just restructuring.
They are a major player in the HVAC industry as well and we have been assured it isn't a liquidation situation.
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perisoft
Joined: 29 Aug 2007
Posts: 2920
Location: Ithaca, NY
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| Posted: Mon Sep 21, 2009 12:39 am Post subject: |
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ecrabb
Forum Moderator
Joined: 13 Mar 2006
Posts: 15909
Location: Utah
TV/Projector: JVC RS40, Epson 5010
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| Posted: Mon Sep 21, 2009 12:51 am Post subject: |
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| greg_mitch wrote: | | Not going under...just restructuring. |
Sooo... Like GM then, but without trainloads full of cash from the feds?
Sounds like marketing BS to me. 
SC
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Mon Sep 21, 2009 12:57 am Post subject: |
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Definitely some marketing BS. You should have read the email we got from our local Rep.
A competitor had sent out an email to a few engineers letting them know the parent company was filing for bankruptcy and then within hours we had one from the rep saying that a large majority of the bond holders had agreed to terms pre-bankruptcy and that it wouldnt take long to get everyone else on board. The HVAC division had something like 180 mil on hand for continued day to day operations.
We have about 500,000 CFM of air handling units coming from them so they better not go under!
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Curt Palme
CRT Tech
Joined: 08 Mar 2006
Posts: 24396
Location: Langley, BC
TV/Projector: All of them!
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| Posted: Mon Sep 21, 2009 2:15 am Post subject: |
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Funny how another local distributor also is into sound wholesaling. WTF does plumbing and HVAC have to do with audio, unless it's installed to put a urinal right in the theater or to cool the projector? 
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Mon Sep 21, 2009 2:33 am Post subject: |
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Nortek owns CES Group which includes HVAC MFR's such as Huntair, Governair, Mammoth, Temptrol, Venmar, Webco, Ventrol, etc.
Look right below the home technology companies...
http://www.nortek-inc.com/subs.html#SUBSCHVAC
This conglomerate was GIGANTIC!
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Curt Palme
CRT Tech
Joined: 08 Mar 2006
Posts: 24396
Location: Langley, BC
TV/Projector: All of them!
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| Posted: Mon Sep 21, 2009 2:52 am Post subject: |
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Interesting, almost all the product lines have directly to do with HT installs. I guess with all of us here doing their own with surplus gear, we're all to blame. THe forum is dead. Long live the forum! 
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ecrabb
Forum Moderator
Joined: 13 Mar 2006
Posts: 15909
Location: Utah
TV/Projector: JVC RS40, Epson 5010
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| Posted: Tue Sep 22, 2009 2:39 pm Post subject: |
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More news on the Nortek restructuring...
Nortek Restructuring Goes To A Vote
| Quote: | Providence, R.I. - Privately held Nortek has begun soliciting votes from debt holders to approve a financial restructuring that would swap most of the company's debt for equity.
Balloting ends Oct. 16, according to New York City-based Financial Balloting Group, Nortek's balloting agent. If debtholders approve the plan, Nortek will file Chapter 11 to get the approval of a bankruptcy court to execute the agreement.
Nortek owns multiple companies that sell products for commercial and residential installation. In home technology, the company's brands include many of the major powers in the residential custom-install industry, such as Aton, Channel Plus, Elan, Gefen, Imerge, M&S, Niles, Omnimount, Panamax, SpeakerCraft, Sunfire and Xantech. The company also owns residential HVAC and ventilation companies and commercial HVAC suppliers.
If the plan is approved, about $1.3 billion out of a total $2.05 billion in debt will be eliminated, the company said.
Earlier this month, Nortek announced that a "substantial portion of its bondholders" had already agreed to its planned restructuring, but those bondholders did not yet include owners of $750 million in 10 percent notes due in 2013. Under the planned restructuring, their indebtedness would either be "reinstated," or it would be "modified" along with note holders getting "some portion of the equity," a Nortek statement said.
Nortek has struggled with servicing debt while revenues have fallen in the wake of the sharp decline in residential and commercial construction. |
Interesting editor's take and more in-depth analysis of Nortek's financial situation:
Nortek Won’t Talk, But The Numbers Will
Looks like they're in a world of hurt.
SC
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emdawgz1
Joined: 14 Mar 2006
Posts: 7949
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| Posted: Tue Sep 22, 2009 2:56 pm Post subject: |
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I think its a good thing. Nortek is a Holding co, it adds ZERO value to the companies.
If they over leveraged themselves, good riddance. I just hope they spin the good companies off again so they can get back to producing good product.
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greg_mitch
Joined: 03 May 2006
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| Posted: Tue Sep 22, 2009 6:09 pm Post subject: |
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| emdawgz1 wrote: | I think its a good thing. Nortek is a Holding co, it adds ZERO value to the companies.
If they over leveraged themselves, good riddance. I just hope they spin the good companies off again so they can get back to producing good product. |
Agreed. I was just trying to fathom how all of these conglomerates work. I don't get why holding companies exist. I need to take some more financial classes. Seems like there is a racket for making money around every corner.
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WanMan
Joined: 19 Mar 2006
Posts: 10270
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| Posted: Tue Sep 22, 2009 11:12 pm Post subject: |
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Was this a company publicly traded?
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Wed Sep 23, 2009 12:31 am Post subject: |
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Yes up until 2004 when a private equity firm out of Boston and the CEO bought it all up and made it private.
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emdawgz1
Joined: 14 Mar 2006
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| Posted: Wed Sep 23, 2009 2:13 am Post subject: |
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| greg_mitch wrote: | | emdawgz1 wrote: | I think its a good thing. Nortek is a Holding co, it adds ZERO value to the companies.
If they over leveraged themselves, good riddance. I just hope they spin the good companies off again so they can get back to producing good product. |
Agreed. I was just trying to fathom how all of these conglomerates work. I don't get why holding companies exist. I need to take some more financial classes. Seems like there is a racket for making money around every corner. |
A holding company is a company that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself, rather its only purpose is owning shares of other companies. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. In the U.S., 80% or more of voting stock must be owned before tax consolidation benefits such as tax-free dividends can be claimed.
Some are like Berkshire, where they hold stock and dont participate in the management. Others wholly own the companies they hold and management is beholden to the holding co.
Like Nortek.
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Spanky Ham
Joined: 22 Mar 2006
Posts: 5643
Location: Comedy Central
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| Posted: Wed Sep 23, 2009 11:28 pm Post subject: |
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Walking the floor of Cedia, I wondered how this many companies could survive especially in audio. As Curt knows, once you get past the voodoo there isn't that much product differentiation. Hopefully, some of these companies will be reacquired by their former owners. At least now the owners will have some money from their previous sale. Although Runco was sold to Planar and I doubt he wants back in, I heard some mention they hoped he bought the company back from Planar at a discount.
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