UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER
SECTION 13(E) OF THE SECURITIES EXCHANGE
ACT OF 1934
VOXX INTERNATIONAL CORPORATION
(Name of the Issuer)
VOXX International Corporation
Gentex Corporation
Instrument Merger Sub, Inc.
(Names of Persons Filing Statement)
Class A Common Stock, Par Value $0.01
per share
Class B Common Stock, Par Value $0.01
per share
(Title of Class of Securities)
Class A Common Stock: 91829F104
(CUSIP
Number of Class of Securities)
|
Patrick M. Lavelle
Chief Executive Officer
VOXX International Corporation
2531 J Lawson Blvd
Orlando, FL 32824
(800) 645-7750 |
|
Instrument Merger Sub, Inc.
c/o Gentex Corporation
Steven Downing
Chief Executive Officer
600 North Centennial Street
Zeeland, MI 49464
(616) 772-1800 |
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
Kenneth Henderson
Aaron Lang
Andrew Rodman
Bryan Cave Leighton Paisner LLP
1290 Avenue of the Americas
New York, NY 10104
(212) 541-2000 |
Larry Stopol
Stopol & Camelo, LLP
180 Marcus Blvd.
Happauge, NY 11788
(516) 317-2869 |
Benjamin Stulberg
Ashley Gullett
Jones Day
901 Lakeside Avenue
Cleveland, OH 44114
(216) 586-3939 |
This statement is filed in connection with (check the appropriate
box):
| a. | x |
The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under
the Securities Exchange Act of 1934. |
| | |
|
| b. | ¨ |
The filing of a registration statement under the Securities Act of 1933. |
| | |
|
| c. | ¨ |
A tender offer. |
| | |
|
| d. | ¨ |
None of the above. |
Check the following box if the soliciting
materials or information statement referred to in checking box (a) are preliminary copies: x
Check the following box if the filing
is a final amendment reporting the results of the transaction: ¨
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule
13E-3, together with the exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”), is
being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities
Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”),
jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”):
(i) VOXX International Corporation (“VOXX” or the “Company”), a Delaware corporation and the
issuer of the shares of Class A common stock, par value $0.01 per share (the “Class A Common Stock”), and
the shares of Class B common stock, par value $0.01 (together with the Class A Common Stock, the “Company Common Stock”),
that is subject to the Rule 13e-3 transaction, (ii) Gentex Corporation, a Michigan corporation (“Gentex”),
and (iii) Instrument Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Gentex (“Merger Sub”).
Gentex and Merger Sub are Filing Persons of this Transaction Statement because they may be deemed affiliates of the Company under a possible
interpretation of the SEC rules governing “going-private” transactions.
On December 17, 2024, the Company, Gentex
and Merger Sub entered into an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time,
the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions and on the
terms set forth therein, Merger Sub will merge with and into the Company, with the Company as the surviving corporation as a wholly owned
subsidiary of Gentex (the “Merger”). Concurrently with the filing of this Schedule 13E-3, the Company is filing with
the SEC a preliminary proxy statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to
a special meeting of the stockholders of the Company (the “Special Meeting”), at which the stockholders of the Company
will consider and vote upon a proposal to approve and adopt the Merger Agreement, a non-binding, advisory vote to approve certain items
of compensation that are based on or otherwise related to the Merger and may become payable to certain named executive officers of the
Company under existing agreements with the Company and a proposal to adjourn the Special Meeting, if necessary or appropriate, including
adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.
The adoption of the Merger Agreement will require the affirmative vote of (i) the holders of at least a majority of the voting power
of all outstanding shares of Company Common Stock entitled to vote in accordance with the General Corporation Law of the State of Delaware
(the “DGCL”), and (ii) at least 66 and two-thirds percent of the voting power of the outstanding shares of Company
Common Stock that is not held by Gentex, Merger Sub or their affiliates, as required pursuant to Section 203 of the DGCL, in each
case outstanding as of the close of business on the record date for the Special Meeting. A copy of the preliminary Proxy Statement is
attached hereto as Exhibit (a)(2)(i) and incorporated herein by reference. A copy of the Merger Agreement is attached hereto
as Exhibit (d)(i) and is also included as Annex A to the preliminary Proxy Statement and incorporated herein by reference.
Under the terms of the Merger Agreement, if the
Merger is completed, each share of Company Common Stock outstanding immediately prior to the consummation of the Merger, other than as
provided below, will be converted into the right to receive $7.50 per share of Company Common Stock in cash (the “Per Share Merger
Consideration”), without interest and less any applicable withholding taxes. The following shares of Company Common Stock will
not be converted into the right to receive the Per Share Merger Consideration in connection with the Merger: (i) shares of Company
Common Stock owned by Gentex, Merger Sub or the Company or any of their respective subsidiaries immediately prior to the Merger becoming
effective (the “Effective Time”), and (ii) shares of Company Common Stock whose holders are entitled to demand
and have properly exercised and validly perfected appraisal rights with respect to such shares of Company Common Stock in accordance with
Section 262 of the DGCL, a copy of which is attached hereto as Exhibit (f) and is also included as Annex D to the preliminary
Proxy Statement and incorporated herein by reference.
The Merger is subject to the satisfaction or waiver
of the conditions set forth in the Merger Agreement, including the approval and adoption of the Merger Agreement by the Company’s
stockholders. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location
in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction
F to Schedule 13E-3, the information contained in the Proxy Statement, including all appendices thereto, is incorporated in its entirety
herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained
in the Proxy Statement and the appendices thereto.
As of the date hereof, the Proxy Statement is in
preliminary form and is subject to completion and/or amendment. Capitalized terms used but not expressly defined in this Schedule 13E-3
shall have the respective meanings given to them in the Proxy Statement.
The information concerning the Company contained
in or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by the Company. Similarly, all information
concerning such other Filing Person contained in or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied
by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other
Filing Person.
While each of the Filing Persons acknowledges that
the Merger is a “going private” transaction for purposes of Rule 13E-3 under the Exchange Act, the filing of this Transaction
Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled”
by any other Filing Person.
Item 1. Summary Term Sheet
The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
Item 2. Subject Company Information
(a)
Name and Address. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“PARTIES TO THE MERGER”
(b)
Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Certain Effects of the Merger”
“THE SPECIAL MEETING - Record Date
and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Market
Price of Shares of Class A Common Stock and Dividends”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Security
Ownership of Certain Beneficial Owners and Management”
(c)
Trading Market and Price. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Market
Price of Shares of Class A Common Stock and Dividends”
(d)
Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Market
Price of Shares of Class A Common Stock and Dividends”
(e)
Prior Public Offerings. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Prior
Public Offerings”
(f)
Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Certain
Transactions in the Shares of the Company Common Stock”
Item 3. Identity and Background of Filing Person
(a)-(c)
Name and Address; Business and Background of Entities; Business and Background of Natural Persons. VOXX International Corporation
is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“PARTIES TO THE MERGER”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY”
“OTHER IMPORTANT INFORMATION REGARDING THE GENTEX
GROUP”
Item 4. Terms of the Transaction
(a)(1)
Tender Offers. Not Applicable.
(a)(2)
Merger or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Material U.S.
Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS - Financing of the
Merger”
“SPECIAL FACTORS - Effective Time
of the Merger”
“SPECIAL FACTORS - Payment of Merger
Consideration and Surrender of Stock Certificates”
“SPECIAL FACTORS - Fees and Expenses”
“SPECIAL FACTORS - Accounting Treatment”
“SPECIAL FACTORS - Regulatory Approvals”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING - Vote Required”
Annex A - Agreement and Plan of Merger
(c)
Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE MERGER AGREEMENT - Treatment
of Company Common Stock and Equity Awards”
“THE MERGER AGREEMENT - Covenants
of Gentex”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
Annex A - Agreement and Plan of Merger
Annex B - Voting and Support Agreement
(d)
Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Purpose and Reasons of the Company
for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Appraisal Rights”
“THE MERGER AGREEMENT - Dissenter’s
Rights”
“THE SPECIAL MEETING - Appraisal
Rights”
“THE MERGER (THE MERGER PROPOSAL - PROPOSAL
1) - Appraisal Rights”
Annex A - Agreement and Plan of Merger
Annex D - Section 262 of the DGCL
(e)
Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
(f)
Eligibility for Listing or Trading. Not Applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(a)
Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Certain
Transactions in the Shares of Company Common Stock”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A - Agreement and Plan of Merger
(b)
Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
Annex A - Agreement and Plan of Merger
Annex B - Voting and Support Agreement
(c)
Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
(e)
Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Intent of the
Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of Gentex
to Vote in Favor of the Merger”
“SPECIAL FACTORS - Payment of Merger Consideration
and Surrender of Stock Certificates”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Security
Ownership of Certain Beneficial Owners and Management”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Prior
Public Offerings”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Certain
Transactions in the Shares of Company Common Stock”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A - Agreement and Plan of Merger
Annex B - Voting and Support Agreement
Item 6. Purposes of the Transaction and Plans or Proposals
(b)
Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
(c)(1)-(8) Plans.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING”
“THE MERGER (THE MERGER AGREEMENT PROPOSAL - PROPOSAL
1)”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
Annex B - Voting and Support Agreement
Item 7. Purposes, Alternatives, Reasons and Effects
(a)
Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
(b)
Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
(c)
Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of Solomon
Partners”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
Annex C - Opinion of Solomon Partners Securities,
LLC
(d)
Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“SPECIAL FACTORS - Plans for the
Company After the Merger”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTORS - Certain Effects
on the Company if the Merger is not Completed”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Material U.S.
Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS - Financing of the
Merger”
“SPECIAL FACTORS - Payment of Merger
Consideration and Surrender of Stock Certificates”
“SPECIAL FACTORS - Fees and Expenses”
“SPECIAL FACTORS - Accounting Treatment”
“THE
MERGER AGREEMENT - Effects of the Merger; Directors and Officers; Articles of Incorporation; Bylaws”
“THE MERGER AGREEMENT - Treatment
of Company Common Stock and Equity Awards”
“THE MERGER AGREEMENT - Exchange
and Payment Procedures”
“THE MERGER AGREEMENT - Dissenter’s
Rights”
“THE MERGER AGREEMENT - Covenants
of the Company”
“THE MERGER AGREEMENT - Covenants
of Gentex”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
Item 8. Fairness of the Transaction
(a),
(b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of Solomon
Partners”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT - Covenants of Gentex”
Annex C - Opinion of Solomon Partners Securities,
LLC
(c)
Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Purpose and Reasons of the Company
for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS – Intent of the Directors
and Executive Officers to Vote in Favor of the Merger”
“THE SPECIAL MEETING - Vote Required”
“THE SPECIAL MEETING - Voting Intentions
of the Company’s Directors and Executive Officers”
“THE SPECIAL MEETING - Voting”
“THE MERGER (THE MERGER PROPOSAL - PROPOSAL
1)”
Annex A - Agreement and Plan of Merger
(d)
Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of Solomon Partners”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
(e)
Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“THE SPECIAL MEETING - Recommendation of the Company
Board”
(f)
Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“THE MERGER AGREEMENT - Acquisition
Proposals”
Annex A - Agreement and Plan of Merger
Item 9. Reports, Opinions, Appraisals and Negotiations
(a)-(c) Report,
Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth
in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of Solomon
Partners”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex C - Opinion of Solomon Partners Securities,
LLC
The reports, opinions or appraisals referenced
in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular
business hours by any interested equity security holder of the Company or representative who has been so designated in writing.
Item 10. Source and Amount of Funds or Other Consideration
(a),
(b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Financing of the
Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT - Exchange
and Payment Procedures”
“THE MERGER AGREEMENT - Covenants
of the Company - Conduct of Our Business Pending the Merger”
“THE MERGER AGREEMENT - Conditions
to the Merger”
Annex A - Agreement
and Plan of Merger
(c)
Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Fees and Expenses”
“THE MERGER AGREEMENT - Termination”
“THE MERGER AGREEMENT - Termination
Fee”
“THE MERGER AGREEMENT - Fees and
Expenses”
“THE SPECIAL MEETING - Solicitation
of Proxies; Payment of Solicitation Expenses”
Annex A - Agreement and Plan of Merger
(d)
Borrowed Funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Financing of the
Merger”
Item 11. Interest in Securities of the Subject Company
(a)
Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive
Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS - Intent of the Directors and
Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS – Intent of the Gentex Group
to Vote in Favor of the Merger”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE SPECIAL MEETING - Voting Intentions of the
Company’s Directors and Executive Officers”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Security
Ownership of Certain Beneficial Owners and Management”
Annex B - Voting and Support Agreement
(b)
Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Voting and Support
Agreement”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Certain
Transactions in the Shares of Company Common Stock”
Annex B - Voting and Support Agreement
Item 12. The Solicitation or Recommendation
(d)
Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions
is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Intent of the
Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the
Gentex Group to Vote in Favor of the Merger”
“SPECIAL FACTORS - Voting and Support
Agreement”
“THE SPECIAL MEETING - Voting Intentions
of the Company’s Directors and Executive Officers”
Annex B - Voting and Support Agreement
(e)
Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the
Gentex Group as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Gentex Group for the Merger”
“THE SPECIAL MEETING – Recommendation of
the Company Board”
“THE MERGER (THE MERGER PROPOSAL - PROPOSAL
1) - Vote Recommendation”
Item 13. Financial Statements
(a)
Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY - Book
Value per Share”
“WHERE YOU CAN FIND MORE INFORMATION”
(b)
Pro Forma Information. Not Applicable.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
(a)
Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“SPECIAL FACTORS - Fees and Expenses”
“THE SPECIAL MEETING - Solicitation
of Proxies; Payment of Solicitation Expenses”
(b)
Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein
by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND
THE SPECIAL MEETING”
“THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of
the Merger”
“SPECIAL FACTORS - Purpose and Reasons
of the Company for the Merger; Recommendation of the Company Board and the Transaction Committee; Fairness of the Merger”
“THE SPECIAL MEETING - Solicitation
of Proxies; Payment of Solicitation Expenses”
Item 15. Additional Information
(b)
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Certain Effects
of the Merger”
“SPECIAL FACTOR - Interests of Executive
Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS
(THE COMPENSATION PROPOSAL - PROPOSAL 2)”
Annex A - Agreement and Plan of Merger
(c)
Other Material Information. The entirety of the Proxy Statement, including all appendices thereto, is incorporated herein by reference.
Item 16. Exhibits
The following exhibits are filed herewith:
| Exhibit No. |
Description |
| (a)(2)(i) |
Preliminary Proxy Statement of VOXX International Corporation (incorporated herein by reference to the Schedule 14A filed concurrently with the SEC) (the “Preliminary Proxy Statement”) |
| (a)(2)(ii) |
Form of Proxy Card (included in the Preliminary Proxy Statement and incorporated herein by reference) |
| (a)(2)(iii) |
Letter to Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference) |
| (a)(2)(iv) |
Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference) |
| (a)(5)(i) |
Press
Release of VOXX International Corporation, dated December 18, 2024 (incorporated by reference to Exhibit 99.1 to VOXX International
Corporation’s Form 8-K filed December 18, 2024) |
| (a)(5)(ii) |
Email to Customers, Partners and Suppliers of VOXX International Corporation, dated December 18, 2024 (incorporated by reference to the Schedule 14A filed on December 18, 2024) |
| (a)(5)(iii) |
Letter
to VOXX International Corporation employees, dated December 18, 2024 (incorporated by reference to the Schedule 14A filed on
December 18, 2024) |
| (a)(5)(iv) |
Press
Release of Gentex Corporation, dated December 18, 2024 (incorporated by reference to Exhibit 99.1 to Gentex Corporation's
Form 8-K filed December 18, 2024) |
| (b)(i) |
Amended Credit Agreement by Gentex Corporation as the Borrower, the Guarantors from Time to Time Party Thereto, and the Lenders Party Thereto, and PNC, National Association as Administrative Agent, dated as of February 21, 2023 (incorporated by reference to Exhibit 10.14 of the Annual Report on Form 10-K filed February 22, 2023) |
| (c)(i) |
Opinion of Solomon Partners Securities, LLC (included as Annex C to the Preliminary Proxy Statement, and incorporated herein by reference) |
| (c)(ii) |
Discussion Materials of Solomon Partners Securities, LLC prepared for the Transaction Committee, dated September 2024** |
| (c)(iii) |
Discussion Materials of Solomon Partners Securities, LLC prepared for the Transaction Committee, dated November 15, 2024** |
| (c)(iv) |
Discussion Materials of Solomon Partners Securities, LLC prepared for the Transaction Committee and the Company Board, dated December 13, 2024 |
| (c)(v) |
Discussion Materials of Solomon Partners Securities, LLC prepared for the Transaction Committee and the Company Board, dated December 17, 2024 |
| (d)(i) |
Agreement and Plan of Merger, dated December 17, 2024, by and among VOXX International Corporation, Gentex Corporation and Instrument Merger Sub, Inc. (included as Annex A to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(ii) |
Voting and Support Agreement, dated December 17, 2024, by and among Gentex Corporation, Instrument Merger Sub, Inc., Shalvoxx A Holdco LLC, Shalvoxx B Holdco LLC, Ari Shalam and certain Shalam family members (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (f) |
Section 262 of the DGCL (included as Annex D to the Proxy Statement, and incorporated herein by reference). |
| (g) |
Not Applicable. |
| 107 |
Filing Fee Table. |
** Certain portions of this exhibit have ben
redacted and separately filed with the SEC pursuant to a request for confidential treatment.
SIGNATURES
After due inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true, complete and correct.
VOXX INTERNATIONAL CORPORATION
| By: | /s/ Patrick M. Lavelle |
|
| | Name: | Patrick M. Lavelle |
|
| | Title: | Chief Executive Officer |
|
After due inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true, complete and correct.
GENTEX CORPORATION
| By: | /s/ Kevin Nash |
|
| | Name: | Kevin Nash |
|
| | Title: | Vice President, Finance, Chief Financial Officer and Treasurer |
|
After due inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true, complete and correct.
INSTRUMENT MERGER SUB, INC.
| By: | /s/ Kevin Nash |
|
| | Name: | Kevin Nash |
|
| | Title: | Chief Financial Officer and Treasurer |
|
| Private and Confidential
AN AFFILIATE OF
PROJECT INSTRUMENT
PROCESS UPDATE AND BID SUMMARY
SEPTEMBER 2024
DRAFT as of 9/27/2024 11:51 AM
Exhibit (c)(ii)
The blacked out information indicates information has been omitted on the basis of a confidential treatment request pursuant to Rule 24b-2
of the Securities Exchange Act of 1934, as amended. This information has been filed separately with the Securities and Exchange
Commission. |
| 1 Private and Confidential
• Solomon began outreach to a targeted group of potential buyers, both
financial and strategic, on 8/12/24
— Strategic buyers have asset(s) that would have synergies and could
leverage VOXX brands
— Financial buyers have a relevant portfolio company or have
experience taking public companies private and optimizing assets
through sales
— Process was publicly announced on 8/27/24, allowing for inbound
interest from other potential interested parties
• 84 total parties were contacted as of 9/27/24, comprising 40 strategics
and 44 financial sponsors
— 25 parties have received the CIM (7 strategics, 18 sponsors), with
several conducting further diligence
— 18 parties gained access to the data room (4 strategics, 14
sponsors); 15 parties signed NRL and received Accordion report (3
strategics, 12 sponsors)
• Guitar, who had initially bid on 5/31/24, acquired additional shares from
Beat Kahli, resulting in a public announcement of the process on 8/27/24
— Guitar signed NDA on 8/26/24 and accessed data room, received
Accordion report and already enlisted advisors to assist with
diligence (Deloitte / Jones Day)
• Initial indications received from 5 parties
— Whole Co. (4 IOIs)
▪ ($7.16 per share)
▪ Guitar ($6.50 per share)
▪ ($6.00-$7.00 per share)
▪ ($150mil Enterprise Value; $6.40 per share using
VOXX’s current capitalization)
— Segment (1 IOI)
▪ (Premium Audio: $50mil Enterprise Value)
EXECUTIVE SUMMARY (AS OF 9/27/24)
Outreach Summary
25
CIMs Sent
Parties Contacted
84
18
Data Room Access
Bids
5
Bids
Received |
| 2
**Declined after receiving data room access. Private and Confidential
OUTREACH DETAILS
Strategic
Financial
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Declined (32)
84 PARTIES WERE CONTACTED (40 STRATEGIC; 44 FINANCIAL), WITH 5 PARTIES REVIEWING MATERIALS
(1 REVIEWING THE NDA, 2 REVIEWING THE CIM, 2 REVIEWING THE DATA ROOM)
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Submitted
IOI (4)
• ‘ • ‘
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Data Room Access (2)
KEY: Segment Interest: Premium Audio Automotive ASA Declined after Gentex 13D
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Sent CIM (2)
Sent NDA (1)
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Declined Post-CIM (14)
Declined (26)
• Gentex
Submitted IOI (1)
• ‘ • ‘
Declined Post-CIM (2) |
| 3 Private and Confidential
BUYERS’ KEY FEEDBACK THEMES
Strategic
• Outside of core interest / product offerings
• Looking for larger companies that are not
manufacturing focused
• Focused on developing internal brands
Areas of Concern
• Familiarity with company, especially premium
audio brands
• Interested in Premium Audio as a standalone
segment
• Interested in automotive side of business
Areas of Excitement
Financial
• Current financial profile
• Softness in macro consumer environment and
declining trends in automotive markets
• Not the right fit for their current portfolio
• Don’t have a clear angle to extract value
• Competition with Gentex to acquire VOXX
• Volatile / unprofitable track record
Areas of Concern
• Attractive scale and overall profile
• Strong brand recognition
• Opportunity for carveout / divestiture of
individual segments
• Progress made on debt paydown / profitability
initiatives
• Familiarity with premium home audio industry
• Opportunities in automotive industry
Areas of Excitement |
| 4 Private and Confidential
(Amounts in Millions, USD) Historical Budget Projected CAGR
FY 2021A FY 2022A FY 2023A FY 2024A FY 2025B FY 2026P FY '21-FY '26
Premium Audio $299.9 $344.0 $274.5 $237.9 $245.4 $268.0 (2.2%)
Automotive Aftermarket 117.7 135.6 101.8 84.1 79.5 102.0 (2.8%)
Automotive OEM 46.2 65.0 73.0 58.3 49.2 70.6 8.9%
European Accessory 33.1 33.5 33.1 43.6 34.6 39.8 3.8%
Corporate 0.7 0.5 0.4 (0.6) 0.2 0.2
Total Revenue $497.6 $578.6 $482.8 $423.3 $408.9 $480.6 (0.7%)
Growth 16.3% (16.6%) (12.3%) (3.4%) 17.5%
Premium Audio $92.2 $98.0 $72.0 $60.4 $77.3 $87.1 (1.1%)
Automotive Aftermarket 33.5 43.7 36.6 31.0 28.2 35.7 1.3%
Automotive OEM 5.8 3.6 5.8 (1.0) 6.1 17.0 23.9%
European Accessory 10.9 11.3 10.0 12.9 10.3 13.5 4.3%
Corporate 0.9 0.8 0.6 0.7 0.3 0.4
Total Gross Profit $143.4 $157.4 $125.1 $104.0 $122.2 $153.8 1.4%
Margin 28.8% 27.2% 25.9% 24.6% 29.9% 32.0%
Premium Audio $49.1 $42.2 $12.9 $8.9 $29.4 $39.8 (4.1%)
Automotive Aftermarket 12.4 16.4 12.1 8.2 5.4 12.0 (0.6%)
Automotive OEM (5.6) (11.2) (7.5) (13.0) (5.7) 4.8 N M
European Accessory 2.0 1.9 1.5 3.5 1.1 4.0 15.3%
Corporate (12.6) (9.6) (9.2) (9.9) (13.1) (13.6)
Total Adjusted EBITDA $45.3 $39.7 $9.8 ($2.4) $17.1 $47.0 0.8%
Growth (12.3%) (75.3%) N M N M 175.1%
Margin 9.1% 6.9% 2.0% N M 4.2% 9.8%
VOXX FINANCIAL SUMMARY
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion”.
a) Represents EBITDA adjusted for non-recurring items.
(a) |
| 5 Private and Confidential
$7.16
$6.50
$6.00
$150.0 Enterprise Value
$7.00
$5.00 $6.00 $7.00 $8.00
WHOLE CO.(a)
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion”.
a) Implied enterprise value calculated using 22.5mil shares, $11.2mil of debt and $5.2mil of cash as of August 31, 2024. Figures are reflective of an assumed closed sale of
Orlando headquarters, Domestic Accessory segment and Jamo / Energy brands.
b)Represents EBITDA adjusted for non-recurring items.
OVERVIEW OF INDICATIONS OF INTEREST
WHOLE CO. BIDS RANGED BETWEEN $6.00 AND $7.16 PER SHARE
($ in Millions, except share price data) Implied Enterprise Value Multiples(a)
2025B
Revenue
2025B Adj.
EBITDA(b)
2026P
Revenue
2026P Adj.
EBITDA(b)
$408.9 $17.1 $480.6 $47.0
0.4x 9.8x 0.3x 3.6x
0.4x 8.9x 0.3x 3.2x
0.3-0.4x 8.3-9.6x 0.3-0.3x 3.0-3.5x
0.4x 8.8x 0.3x 3.2x
Strategic Financial Sponsor
SEGMENT (PREMIUM AUDIO)
Implied Enterprise Value Multiples(a)
2025B
Revenue
2025B Adj.
EBITDA(b)
2026P
Revenue
2026P Adj.
EBITDA(b)
$245.4 $29.4 $268.0 $39.8
0.2x 1.7x 0.2x 1.3x
Premium
9/26 Share
Price
$6.05
18.3%
7.4%
(0.8%)-15.7%
5.7%
EV: $141 EV: $164
EV: $152
EV: $167
Implied Share Price: $6.40
$50.0 Enterprise
Value
$25.0 $50.0 $75.0 |
| 6 Private and Confidential
Valuation (and
Associated
Metrics)
• $5.50 per share ($124.0mil Equity Value)
• Implied Total Proposal Enterprise Value: $186.3mil
‒ (10.9x 2025B Adj. EBITDA of $17.1mil)
• Implied Total Current Enterprise Value: $129.8mil(a)
‒ (7.6x 2025B Adj. EBITDA of $17.1mil)
• $6.50 per share ($146.1mil Equity Value)
‒ (7.4% premium to 9/26 stock price)
• Implied Total Proposal Enterprise Value: $210.6mil
‒ (12.3x 2025B Adj. EBITDA of $17.1mil)
• Implied Total Current Enterprise Value: $152.3mil(a)
‒ (8.9x 2025B Adj. EBITDA of $17.1mil)
• Valuation based on financials and capital structure set forth
in VOXX’s 5/31 10-Q
Structure
• Reverse triangular merger
• Purchase of 100% of VOXX’s fully diluted equity
• Shares purchased with cash, Guitar stock or 50/50 combination
of both at VOXX’s discretion
• Anticipates entering into retention agreements with key
employees
• Reverse triangular merger
• Purchase of 100% of VOXX’s issued and outstanding shares not
already owned by Guitar
• Shares purchased with cash, not subject to any financing
contingency
Conditions /
Approvals
• Asked for exclusivity
• Board of Directors is in support of the proposal
• Transaction would not be subject to any financing contingency
• Mr. Shalam and family members with significant ownership
interests enter into agreements to vote in favor of transaction
• Amendment of ASA JV agreement so that any non-competition provisions apply solely to VOXX and not future
affiliates of VOXX (e.g., Guitar)
• Will not require any further corporate or shareholder approvals
beyond final Board approval
• Transaction would not be subject to any financing contingency
Advisors • Not Provided • Deloitte (Financial and Tax), Jones Day (Legal), Acropolis
(Valuation)
Key Diligence
Areas • Not Provided • Financial / Tax, Legal, Real Estate, Insurance, Employees
GUITAR PROPOSAL SUMMARY
a) Calculated using 22.5mil shares, $11.2mil of debt and $5.2mil of cash as of August 31, 2024. Figures are reflective of an assumed closed sale of Orlando headquarters,
Domestic Accessory segment and Jamo / Energy brands.
5/31 PROPOSAL 9/26 PROPOSAL |
| 7 Private and Confidential
(Amounts in Millions, except share price)
5/31 Proposal
(2/29 Shares and Debt)
9/26 Proposal
(5/31 Shares and Debt)
Illustrative 9/26 Proposal
(8/31 Shares and Debt) (a)
Share Price $5.50 $6.50 $9.09
Shares Outstanding 22.54 22.48 22.51
Implied Total Proposal Equity Value $124.0 $146.1 $204.5
Plus: Debt $73.3 $68.6 $11.2
Less: Cash (11.0) (4.2) (5.2)
Implied Total Proposal Enterprise Value $186.3 $210.6 $210.6
Implied Total Current Enterprise Value (a) $129.8 $152.3 $210.6
2025B Adj. EBITDA $17.1 $17.1 $17.1
Implied Proposal EV / 2025B Adj. EBITDA 10.9 x 12.3 x 12.3 x
Implied Current EV / 2025B Adj. EBITDA 7.6 x 8.9 x 12.3 x
Existing Shares Owned by Guitar 3.3 6.5 6.5
% of VOXX Owned Through Existing Shares 14.7% 28.8% 28.7%
Per Share Price Paid for Total Existing Shares $10.00 $7.50 $7.50
Aggregate Value of Existing Shares $33.1 $48.5 $48.5
Cost to Purchase Remaining Shares 105.8 104.1 145.8
Implied Total Cost for All Shares Outstanding $138.9 $152.6 $194.3
Implied Per Share Cost Basis $6.16 $6.79 $8.63
GUITAR PROPOSAL ANALYSIS
Source: “VOXX International – Capitalization Summary (as of 08.31.2024)” and publicly available information.
a) Calculated using 22.5mil shares, $11.2mil of debt and $5.2mil of cash as of August 31, 2024. Figures are reflective of an assumed closed sale of Orlando headquarters,
Domestic Accessory segment and Jamo / Energy brands.
Guitar’s new
proposal assuming
VOXX’s capital
structure as of 5/31,
before the paydown
of debt
Illustrative proposal assumes
the same enterprise value as
Guitar’s 9/26 proposal, but
calculates share price based
on 8/31 capital structure
reflecting the paydown of
debt(a)
Guitar’s original
proposal which
assumed VOXX’s
capital structure as of
2/29, before the
paydown of debt
Original Proposal New Proposal Illustrative Proposal |
| 8 Private and Confidential
a) Implied current enterprise value calculated using 22.5mil shares, $11.2mil of debt and $5.2mil of cash as of August 31, 2024. Figures are reflective of an assumed closed
sale of Orlando headquarters, Domestic Accessory segment and Jamo / Energy brands.
DETAIL ON INDICATIONS OF INTEREST
Company
Description
• ‘ ‘
• ‘ ‘
‘ ‘
• ‘ ‘
• ‘ ‘
Whole Co. /
Segment • Whole Company • Whole Company
Valuation (and
Associated
Metrics)
• $7.16 per share ($161.2mil Equity Value)
• Implied Total Proposal / Current Enterprise Value: $167.2mil(a)
‒ (9.8x 2025B Adj. EBITDA of $17.1mil)
• $6.00 – $7.00 per share ($135.1mil – $157.6mil equity value)
• Implied Total Proposal Enterprise Value: $163.4mil - $185.9mil
‒ (9.6x – 10.9x 2025B Adj. EBITDA of $17.1mil)
• Implied Total Current Enterprise Value: $141.1mil – $163.6mil(a)
‒ (8.3x – 9.6x 2025B Adj. EBITDA of $17.1mil)
Valuation
Methodology
• 20% premium to 9/25 share price of $5.97
• Assumes net debt of $6.0mil
• Used financials presented in CIM, specifically FY 2024 / 2025 Revenue
and Adj. EBITDA for Whole Co. and PAC
• Assumes net debt of $28.3mil
Structure
• Will be funded with a combination of debt and equity, not subject to a
financing contingency
• Will offer competitive equity participation plans for Management
• Shares purchased with cash; financed with a combination of debt from
third-party sources and equity capital from
• Will offer an equity incentive program to go-forward Management
Timing
• Looking to move quickly through diligence
• Would complete confirmatory diligence in parallel with negotiation of
purchase agreement and other ancillary documents
• Looking to move quickly through diligence and prepared to commit full
resources to provide an LOI within a timeframe acceptable to VOXX
Conditions /
Approvals
• Senior members of IC have reviewed, final approval will require no more
than one day upon completion of diligence • Not subject to any additional internal or external approvals
Fund Size /
Similar Deals
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• ‘ ‘
• ‘ ‘
• ‘ ‘
• ‘ ‘
Advisors
• KPMG (FDD, Tax), Kirkland & Ellis (Legal)
• Additional advisors for Insurance, Environmental and IT
• Jones Day (Legal), RSM (Accounting and Tax), Lockton (Insurance and
Benefits)
Key Diligence
Areas
• Validation of operational improvement opportunities in Accordion report
• Confirmation of EBITDA and cash flow performance
• Insight and validation into Management’s projections, CapEx and
growth opportunities
• Operations and financial performance
• Legal, HR, Accounting, Tax and IT
Degree of
Expressed
Interest |
| 9 Private and Confidential
DETAIL ON INDICATIONS OF INTEREST (CONT.)
Company
Description
• ‘ ‘
• ‘ ‘
‘ ‘
• ‘ ‘
• ‘ ‘
‘ ‘
Whole Co. /
Segment • Whole Company • Segment (Premium Audio)
Valuation (and
Associated
Metrics)
• $150.0mil Proposed Enterprise Value
‒ (8.8x 2025B Adj. EBITDA of $17.1mil)
• Represents an Equity Value of $144.0mil and a $6.40 share price,
assuming 8/31 net debt of $6.0mil
• VOXX is entitled to receive 50% of any future dividends,
distributions, or sale proceeds from VOXX’s JV interests
• $50.0mil Proposed Enterprise Value (Premium Audio)
‒ (1.7x 2025B Adj. EBITDA of $29.4mil)
Valuation
Methodology • Not Provided
• Based on FY 2024 Revenue of $237.9mil and Adj. EBITDA of $8.9mil
• Represents 5.6x FY 2024 Adj. EBITDA
• Assumes all owned real estate, intellectual property and other assets
are included in the transaction
Structure
• Purchased with cash; financed with a combination of debt and equity
• Would acquire VOXX individually, through a stock purchase agreement
or asset purchase agreement, whichever is preferred by VOXX
• Cash-free and debt-free basis
• Purchased with cash; financed with a combination of debt and equity
• Would work with VOXX to determine most effective structure for tax
purposes
Timing • Believe transaction can be completed in 60 days • Expect to close within 60 days of execution of exclusive LOI
Conditions /
Approvals • No internal steps for approval aside from completion of diligence
• Satisfactory completion of diligence, IC approval
• Predicated on the opportunity to work with Management; expect to
retain key employees
Fund Size /
Similar Deals • ‘ ‘
• ‘ ‘
• ‘ ‘
• ‘ ‘
Advisors • Not Provided • Not Provided
Key Diligence
Areas
• Current performance and financial projections, working capital, real
estate, vendor and customer relationships, supply chain / distribution
• Believes additional due diligence can be completed within the next 60
days
• Current performance and financial projections, including a QoE
• Evaluation of growth plan and ability to operate as stand-alone segment
• Tax, Legal, Environmental and IT
Degree of
Expressed
Interest |
| 10 Private and Confidential
ANNOTATED 3-YEAR STOCK CHART
--
2.00
4.00
6.00
8.00
10.00
12.00
14.00
$16.00
Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24
5/31/2024: Guitar
proposal ($5.50 share)
8/27/2024: Public
announcement of
exploration of strategic
alternatives
3-year
average: $8.93
5/14/2024: VOXX
misses FY Q4 2024
earnings by ~14%
4/13/2023: VOXX 3-year
high of $13.92
Source: Capital IQ as of September 26, 2024, and publicly available information. |
| 11 Private and Confidential
Premium / (Discount) to EV / Revenue EV / Adjusted EBITDA
Unaffected Current 1-Year 1-Year 1-Year Actual Budget Projected Actual Budget Projected
Stock Stock Price Stock Price Average High Low Equity Enterprise FY 2024 FY 2025 FY 2026 FY 2024 FY 2025 FY 2026
Price $2.85 $6.05 $6.92 $11.45 $2.32 Value Value $423.3 $408.9 $480.6 ($2.4) $17.1 $47.0
$2.85 - - (52.9%) (58.8%) (75.1%) 22.8% $64 $70 0.2 x 0.2 x 0.1 x NM 4.1 x 1.5 x
$5.00 75.4% (17.4%) (27.7%) (56.3%) 115.5% $113 $119 0.3 x 0.3 x 0.2 x NM 6.9 x 2.5 x
$5.50 93.0% (9.1%) (20.5%) (52.0%) 137.1% $124 $130 0.3 x 0.3 x 0.3 x NM 7.6 x 2.8 x
$6.05 112.3% - - (12.5%) (47.2%) 160.8% $136 $142 0.3 x 0.3 x 0.3 x NM 8.3 x 3.0 x
$6.50 128.1% 7.4% (6.0%) (43.2%) 180.2% $146 $152 0.4 x 0.4 x 0.3 x NM 8.9 x 3.2 x
$7.00 145.6% 15.7% 1.2% (38.9%) 201.7% $158 $164 0.4 x 0.4 x 0.3 x NM 9.6 x 3.5 x
$7.50 163.2% 24.0% 8.5% (34.5%) 223.3% $169 $175 0.4 x 0.4 x 0.4 x NM 10.2 x 3.7 x
$8.00 180.7% 32.2% 15.7% (30.1%) 244.8% $180 $186 0.4 x 0.5 x 0.4 x NM 10.9 x 4.0 x
$8.50 198.2% 40.5% 22.9% (25.8%) 266.4% $191 $197 0.5 x 0.5 x 0.4 x NM 11.5 x 4.2 x
$9.00 215.8% 48.8% 30.1% (21.4%) 287.9% $203 $209 0.5 x 0.5 x 0.4 x NM 12.2 x 4.4 x
$9.50 233.3% 57.0% 37.4% (17.0%) 309.5% $214 $220 0.5 x 0.5 x 0.5 x NM 12.9 x 4.7 x
$10.00 250.9% 65.3% 44.6% (12.7%) 331.0% $225 $231 0.5 x 0.6 x 0.5 x NM 13.5 x 4.9 x
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion”, “VOXX International – Capitalization Summary (as of 08.31.2024)”
and publicly available information.
Note: Fiscal year represents year end of February 28th.
a) Current stock price, 1-year average, high and low as of September 26, 2024.
b)Represents EBITDA adjusted for non-recurring items.
c) Represents close as of August 26, 2024, the day before VOXX's public announcement of their exploration of strategic alternatives.
d)Calculated on 22.5mil shares outstanding as of August 31, 2024. Includes 20.2mil Class A common stock and 2.3mil Class B common stock. Does not include any
restricted stock units due to the grant prices being higher than the average market price of VOXX’s common stock during the period.
e) Enterprise value calculated as equity value plus net debt of $6.0mil as of August 31, 2024 (total debt of $11.2mil less cash and cash equivalents of $5.2mil; figures are
reflective of an assumed closed sale of Orlando headquarters, Domestic Accessory segment and Jamo / Energy brands). Enterprise value does not include negative non-controlling interest of ($36.3mil) as of August 31, 2024.
ILLUSTRATIVE ANALYSIS AT VARIOUS PRICES
(c)
(d)
(Amounts in Millions USD, except per share data)
(a)
EXCLUDES DOMESTIC ACCESSORY AND EYELOCK / BIOCENTURION FINANCIALS
(b)
(e) |
| 12 Private and Confidential
SELECTED COMPARABLE COMPANIES SUMMARY
EV / CY2024E EBITDA EV / CY2025E EBITDA
Note: Figures represent median multiples.
Source: Capital IQ as of September 23, 2024.
8.6 x
5.0 x
4.4 x 4.6 x
Premium Audio Automotive |
| 13 Private and Confidential
EV / CY2024E EBITDA – PREMIUM AUDIO
SELECTED COMPARABLE COMPANIES BY INDUSTRY
Source: Capital IQ as of September 23, 2024.
EV / EBITDA BENCHMARKING – AUDIO AND AUTOMOTIVE
Median: 8.6x
EV / CY2024E EBITDA – AUTOMOTIVE
Median: 5.0x
13.1 x
4.1 x
NM
Dolby B&O Sonos
11.9 x
10.6 x
7.7 x
6.4 x 6.1 x 5.4 x 4.6 x 4.6 x 4.5 x
2.7 x 2.4 x 2.1 x
Dorman Gentex Aptiv Autoliv Denso Visteon Adient Lear Magna Forvia Valeo Tokai Rika |
| 14 Private and Confidential
SELECTED COMPARABLE COMPANIES DETAIL
Source: Capital IQ as of September 23, 2024.
(Amounts in Millions USD, Except Per Share Values) Valuation Multiples
Stock Price 52-Week 52-Week Equity Enterprise EV / Revenue EV / EBITDA
9/23/24 Low High Value Value CY2024 CY2025 CY2024 CY2025 CY2024 CY2025
Premium Audio
B&O $1.28 $1.24 $1.63 $154 $136 0.4 x 0.3 x 4.1 x 2.7 x 8.7% 11.8%
Dolby 72.85 66.75 89.38 6,946 6,092 4.7 x 4.4 x 13.1 x NA 36.1% NA
Sonos 12.58 9.86 19.51 1,522 1,246 0.9 x 0.8 x NM 6.1 x 2.7% 13.7%
Premium Audio Median 0.9 x 0.8 x 8.6 x 4.4 x 8.7% 12.8%
Premium Audio Mean 2.0 x 1.9 x 8.6 x 4.4 x 15.9% 12.8%
Automotive
Adient $22.12 $19.90 $37.10 $1,929 $3,934 0.3 x 0.3 x 4.6 x 4.2 x 5.8% 6.4%
Aptiv 71.56 65.38 99.14 19,018 24,143 1.2 x 1.1 x 7.7 x 7.1 x 15.5% 15.9%
Autoliv 92.99 90.17 129.11 7,447 9,047 0.9 x 0.8 x 6.4 x 5.5 x 13.3% 14.7%
Denso 14.66 13.04 20.54 42,686 42,062 0.8 x 0.8 x 6.1 x 5.5 x 13.8% 14.7%
Dorman 114.98 62.18 117.50 3,537 4,036 2.0 x 1.9 x 11.9 x 11.2 x 17.0% 17.2%
Forvia 8.93 8.88 23.43 1,753 10,212 0.3 x 0.3 x 2.7 x 2.4 x 12.5% 13.2%
Gentex 30.15 28.13 37.10 6,941 6,665 2.8 x 2.6 x 10.6 x 9.3 x 26.1% 27.5%
Lear 108.60 103.43 146.07 6,109 7,962 0.3 x 0.3 x 4.6 x 4.2 x 7.4% 7.7%
Magna 42.17 38.03 59.82 12,156 17,432 0.4 x 0.4 x 4.5 x 4.1 x 8.9% 9.6%
Tokai Rika 13.71 11.97 18.25 1,160 748 0.2 x 0.2 x 2.1 x 2.0 x 8.7% 8.6%
Valeo 10.74 9.63 18.71 2,608 7,312 0.3 x 0.3 x 2.4 x 2.1 x 12.6% 13.4%
Visteon 94.52 88.69 138.87 2,609 2,516 0.6 x 0.6 x 5.4 x 4.9 x 11.9% 12.2%
Automotive Median 0.5 x 0.5 x 5.0 x 4.6 x 12.6% 13.3%
Automotive Mean 0.8 x 0.8 x 5.7 x 5.2 x 12.8% 13.4%
EBITDA Margin |
| 15 Private and Confidential
10.0 x
7.2 x
Premium Audio Automotive
SELECTED PRECEDENT TRANSACTIONS SUMMARY
EV / LTM EBITDA
Note: Figures represent median multiples.
Source: Publicly available information. |
| 16 Private and Confidential
SELECTED PREMIUM AUDIO PRECEDENT TRANSACTIONS
Source: Publicly available information.
a) Figures are converted using USD / KRW exchange rate at time of transaction.
(Amounts in Millions)
Date Enterprise EV as a Multiple of:
Announced Acquiror Name Target Name Value LTM Sales LTM EBITDA
Dec-23 RODE Microphones Mackie $120 N A N A
Aug-23 AAC Technologies Premium Sounds Solutions ~$450 N A N A
Aug-23 Garmin JL Audio N A N A N A
Aug-23 Avpro Global Holdings Audiocontrol (Home Audio Division) N A N A N A
Jun-22 Highlander Partners McIntosh Group N A N A N A
Feb-22 Masimo Sound United $1,025 N A N A
May-21 VOXX International / Sharp Corporation Onkyo Home Entertainment (AV Business) $37 N A N A
May-21 Noritsu Koki JLab Audio $370 N A N A
Feb-21 Sonova Holding Sennheiser (Consumer Division) €200 ~0.8 x N A
Oct-20 Sound United Bowers & Wilkins N A N A N A
Oct-20 Loxone quadral N A N A N A
Sep-19 Sonance James Loudspeaker N A N A N A
Jul-19 Focusrite Pro Audio (ADAM Audio) €18 1.4 x 10.6 x
Apr-18 Naxicap Partners Lautsprecher Teufel N A N A N A
Jul-17 Samsung Electronics ARCAM N A N A N A
Mar-17 Sound United D+M Group N A N A N A
Feb-17 Control4 Corp Triad Speakers $10 ~1.1 x N A
Nov-16 Samsung Electronics Harman International Industries $8,198 (a) 1.2 x 9.5 x
Sep-16 Tessera Technologies DTS $850 5.2 x 24.9 x
Jun-16 Mill Road Capital Skullcandy $151 0.6 x 9.3 x
Apr-16 Logitech Jaybird $50 N A N A
Median 1.1 x 10.0 x
Mean 1.7 x 13.6 x |
| 17 Private and Confidential
SELECTED AUTOMOTIVE PRECEDENT TRANSACTIONS
Source: Publicly available information.
a) EBITDA includes noncontrolling interest.
(Amounts in Millions)
Date Enterprise EV as a Multiple of:
Announced Acquiror Name Target Name Value LTM Sales LTM EBITDA
Mar-24 Usami Koyu Corp PIAA Corp ¥3,500 0.4 x N A
May-22 Lear IG Bauerhin €140 N A N A
Feb-22 Patrick Industries Rockford Fosgate ~$133 ~0.9 x N A
Feb-22 Apollo Tenneco $7,100 0.4 x 6.2 x (a)
Dec-21 CCL Industries McGavigan Holdings $106 1.9 x 7.2 x
Oct-21 Lear Kongsberg Automotive (ICS) €175 0.5 x N M
Aug-21 Faurecia Hella €6,667 1.2 x 10.1 x
Jul-20 VOXX International Directed (Automotive Aftermarket) $11.0 N A N A
Feb-20 VOXX International Vehicle Safety Holding Corp. $16.5 ~0.6 x ~5.5 x
Jul-18 Magna International OLSA €230 N A N A
Nov-17 Gentherm Etratech ~$64 ~1.0 x ~8.5 x
Jun-17 TE Connectivity Hirschmann Car Communication ~$170 N A N A
Apr-17 VOXX International Rosen Electronics $2 N A N A
Median 0.9 x 7.2 x
Mean 0.9 x 7.5 x |
| 18 Private and Confidential
PROCESS TIMELINE
Key Dates
• September 26: Initial Indications Due
• October 7 – October 31: Management Meetings / Final Due Diligence with Selected Parties
• October 14: Distribute Draft Agreement and Disclosure Schedules
• October 29: Markup to Draft Agreement and Disclosure Schedules Due
• November 5: Final Bid Submission Due
• November 6 – November 13: Negotiate and Execute Definitive Agreements
• Thereafter: HSR Filing, SEC Filing and Shareholder Vote; Closing
September October November
S M T W T F S S M T W T F S S M T W T F S
1 2 3 4 5 6 7 1 2 3 4 5 1 2
8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9
15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16
22 23 24 25 26 27 2 8 20 21 22 23 24 25 26 17 18 19 20 21 22 23
2 9 3 0 27 28 29 30 31 24 25 26 27 28 29 3 0
National Holiday Management Meetings / Final Due Diligence Final Bid Submission Due
with Selected Parties
Accommodate Due Diligence requests / Distribute Draft Agreement and Disclosure Negotiate and Execute Definitive
Management Calls Schedules Agreements
Initial Indications Due Markup to Draft Agreement and Disclosure HSR Filing, SEC Filing and Shareholder
Schedules Due Vote; Closing
National Holiday |
| Private and Confidential
AN AFFILIATE OF
PROJECT INSTRUMENT
FINAL BID SUMMARY
NOVEMBER 15, 2024
DRAFT as of 11/15/2024 10:00 AM
Exhibit (c)(iii)
The blacked out information indicates information has been omitted on the basis of a confidential treatment request pursuant to Rule 24b-2
of the Securities Exchange Act of 1934, as amended. This information has been filed separately with the Securities and Exchange
Commission. |
| 1 Private and Confidential
• 90 total parties were contacted beginning 08/12/2024, comprising
43 strategics and 47 financial sponsors
• Guitar, who had initially bid on 5/31/24, acquired additional shares
from Beat Kahli, resulting in a public announcement of the
strategic alternatives process on 8/27/24
• Initial bids received on 9/26/24 from 5 parties – 4 WholeCo,
1 Premium Audio (PAC) only
— Invited 4 parties to continue diligence; indicated to PAC
bidder that implied value ($50mil) was not in the desired
range
— Distributed downward-revised 2025B and 2026P financials on
10/10/24
— 2 parties dropped out shortly before scheduled management
meetings, citing downward revision of budget (specifically
lack of stabilization in PAC) timeline / planning concerns,
additional required post-close discovery work, and elevated
stock price
• Final bids received from 2 parties on 11/14/24
— ($6.00 per share)
▪ Bid $7.16 per share on 09/26/24
— Guitar ($7.00 per share)
▪ Bid $5.50 per share on 05/31/24
▪ Bid $6.50 per share on 09/26/24
EXECUTIVE SUMMARY (AS OF 11/15/24)
Outreach Summary
30
CIMs Sent
Parties Contacted
90
18
Data Room Access
Bids
5
IOIs Received
Final Bids
Received
2
CIM Data Room Accordion
Strategic 10 5 4
Sponsor 20 13 11
Total 30 18 15
DRAFT |
| 2 Private and Confidential
a) Implied equity value calculated on 23.5mil fully diluted shares outstanding. Includes 20.3mil Class A common stock, 2.3mil Class B common stock and 1.0mil RSUs as of
October 31, 2024.
b)Implied enterprise value calculated as equity value plus net debt of $17.0mil as of October 31, 2024 (total debt of $20.1mil less cash and cash equivalents of $3.1mil).
Enterprise value does not include negative non-controlling interest of ($36.3mil) as of August 31, 2024.
c) Represents EBITDA adjusted for non-recurring items.
DETAIL ON FINAL BIDS
Company Description
• ‘ ‘
• ‘ ‘
‘
• Global provider of dimmable devices, vision systems, sensors and
advanced electronic products
Price per Share • $6.00 • $7.00
Implied Equity Value (a) • $141.3mil equity value • $164.8mil equity value
Implied Enterprise
Value (b) • $158.3mil enterprise value
• $181.8mil enterprise value
• ($216.3mil implied enterprise value assuming Guitar uses 10/31 capital
structure)
EV / Adj. EBITDA (c) • 13.1x 2025B Adj. EBITDA of $12.1mil • 15.0x 2025B Adj. EBITDA of $12.1mil
• (17.8x 2025B Adj. EBITDA of $12.1mil assuming 10/31 capital structure)
Valuation
Methodology
• Assumes the same enterprise value implied in initial bid
• Deduction to equity value due to CIC and severance payments
• Attributes a $0.58 per share ($13.1mil of equity value) reduction to reflect
“performance impact”
• Would consider an acquisition of Premium Audio Company and
VOXX’s stake in Audiovox Specialized Applications, LLC for $65mil
• Assumes financials and capitalization will be consistent with August 31
figures
• CIC and severance payments will be paid according to agreements
Sources of Capital • Equity backstop for the entire purchase price
• Third party financing post-transaction • Cash on hand and cash currently available via revolving credit facility
Status of Financing
• Not subject to a financing contingency
• Received term sheets from financing partners and expect to close on
consistent terms
• Not subject to a financing contingency
Approvals for Signing • Investment committee has approved this transaction, final approval
would require no more than one day upon completion of due diligence
• Shalam family enters into voting and support agreements
• Amendment of ASA JV and Purchase Agreement to avoid Guitar’s inclusion
in any non-compete provisions
• Final review and approval by Guitar Board of Directors
Process / Timing
• Expect to complete work and sign transaction documents within 3
weeks
• 3-week exclusivity clause post signing of LOI
• Not provided
Outstanding Diligence
to Signing • 3
rd party confirmatory items (legal, HR, tax, environmental)
• Updated financial / accounting and tax due diligence requests provided
• Legal due diligence (corporate, HR, environmental, real estate, compliance)
DRAFT
GUITAR |
| 3 Private and Confidential
(Amounts in Millions, except share price)
11/14 Proposal
(10/31 Shares, 8/31 Debt)
Illustrative 11/14 Proposal
(10/31 Shares and 10/31 Debt)
Share Price $7.00 $8.47
Shares Outstanding 23.55 23.55
Implied Total Proposal Equity Value $164.8 $199.3
Plus: Debt $55.2 $20.1
Less: Cash (3.7) (3.1)
Implied Total Proposal Enterprise Value $216.3 $216.3
Implied Total Current Enterprise Value $181.8 $216.3
2025B Adj. EBITDA $12.1 $12.1
Implied Proposal EV / 2025B Adj. EBITDA 17.8 x 17.8 x
Implied Current EV / 2025B Adj. EBITDA 15.0 x 17.8 x
Existing Shares Owned by Guitar 6.5 6.5
% of VOXX Owned Through Existing Shares 27.5% 27.5%
Per Share Price Paid for Total Existing Shares $7.50 $7.50
Aggregate Value of Existing Shares $48.5 $48.5
Cost to Purchase Remaining Shares 119.6 144.6
Implied Total Cost for All Shares Outstanding $168.1 $193.1
Implied Per Share Cost Basis $7.14 $8.20
GUITAR PROPOSAL ANALYSIS
New Proposal Illustrative Proposal
Guitar’s new proposal
assuming VOXX’s
capital structure as of
8/31, before the full
paydown of debt
Illustrative proposal assumes
the same enterprise value as
Guitar’s 11/14 proposal, but
calculates share price based on
10/31 capital structure reflecting
the paydown of debt
DRAFT |
| 4 Private and Confidential
Premium / (Discount) to EV / Revenue EV / Adjusted EBITDA
Unaffected Current 1-Year 1-Year 1-Year Budget Projected Budget Projected Illustrative
Stock Stock Price Stock Price Average High Low Equity Enterprise FY 2025 FY 2026 FY 2025 FY 2026 EBITDA
Price $2.85 $6.80 $6.71 $11.45 $2.32 Value Value $405.1 $478.6 $12.1 $39.2 $28.0
$2.85 - - (58%) (58%) (75%) 23% $67 $84 0.2 x 0.2 x 6.9 x 2.1 x 3.0 x
$5.50 93% (19%) (18%) (52%) 137% $130 $147 0.4 x 0.3 x 12.1 x 3.7 x 5.2 x
$6.00 111% (12%) (11%) (48%) 159% $141 $158 0.4 x 0.3 x 13.1 x 4.0 x 5.7 x
$6.80 139% - - 1% (41%) 193% $160 $177 0.4 x 0.4 x 14.6 x 4.5 x 6.3 x
$7.00 146% 3% 4% (39%) 202% $165 $182 0.4 x 0.4 x 15.0 x 4.6 x 6.5 x
$7.25 154% 7% 8 % (37%) 213% $171 $188 0.5 x 0.4 x 15.5 x 4.8 x 6.7 x
$7.50 163% 10% 12% (34%) 223% $177 $194 0.5 x 0.4 x 16.0 x 4.9 x 6.9 x
$7.75 172% 14% 16% (32%) 234% $182 $199 0.5 x 0.4 x 16.5 x 5.1 x 7.1 x
$8.00 181% 18% 19% (30%) 245% $188 $205 0.5 x 0.4 x 16.9 x 5.2 x 7.3 x
$8.25 189% 21% 23% (28%) 256% $194 $211 0.5 x 0.4 x 17.4 x 5.4 x 7.5 x
$8.50 198% 25% 27% (26%) 266% $200 $217 0.5 x 0.5 x 17.9 x 5.5 x 7.8 x
$8.75 207% 29% 30% (24%) 277% $206 $223 0.6 x 0.5 x 18.4 x 5.7 x 8.0 x
$9.00 216% 32% 34% (21%) 288% $212 $229 0.6 x 0.5 x 18.9 x 5.8 x 8.2 x
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 8.31.24)”, “VOXX International – Capitalization Summary (as of
10.31.2024)” and publicly available information.
a) Current stock price, 1-year average, high and low as of November 14, 2024.
b)Represents EBITDA adjusted for non-recurring items.
c) Represents close as of August 26, 2024, the day before VOXX's public announcement of their exploration of strategic alternatives.
d)Calculated on 23.5mil fully diluted shares outstanding. Includes 20.3mil Class A common stock, 2.3mil Class B common stock and 1.0mil RSUs as of October 31, 2024.
e) Enterprise value calculated as equity value plus net debt of $17.0mil as of October 31, 2024 (total debt of $20.1mil less cash and cash equivalents of $3.1mil). Enterprise value
does not include negative non-controlling interest of ($36.3mil) as of August 31, 2024.
f) Illustrative EBITDA calculated as 2026P EBITDA discounted to the same level that 2025B missed projections. This is purely illustrative and would require further diligence
to refine.
ANALYSIS OF BIDS
(d)
(c)
(Amounts in Millions USD, except per share data)
(a)
EXCLUDES DOMESTIC ACCESSORY AND EYELOCK / BIOCENTURION FINANCIALS
(e)
(b)
‘
Guitar Final Bid
Current Stock Price
(a) (b)
(f)
DRAFT |
| 5 Private and Confidential
--
2.00
4.00
6.00
8.00
10.00
12.00
14.00
$16.00
Nov-21 Mar-22 Jul-22 Nov-22 Mar-23 Jul-23 Nov-23 Mar-24 Jul-24 Nov-24
VOXX STOCK PERFORMANCE
5/31/2024: Guitar
proposal ($5.50 share)
9/5/2024: Announced
successful sale of
Domestic Accessories,
Jamo / Energy brands
4/13/2023: 3-year high
of $13.92
Source: Capital IQ as of November 14, 2024, and publicly available information.
8/27/2024: Public
announcement of
exploration of
strategic alternatives
10/10/2024: Released
Q2 2025 earnings
3-year
average: $8.73
5/14/2024: Missed FY
Q4 2024 earnings by
~14%
Current:
$6.80
‘
Guitar Final Bid
DRAFT
Post-Announcement |
| 6 Private and Confidential
ILLUSTRATIVE SUM OF THE PARTS VALUATION
Scenario 1: Sale in 2 Transactions ((Auto + German Accessories + JVs) and PAC))
o Benefits
‒ Unlock operational efficiencies through separation of segments
‒ Maximize sale value of segments through separate transactions
o Considerations
‒ Incremental costs at PAC through additional corporate burden to EBITDA (estimated at $5mil)
‒ Severance costs through elimination of corporate (estimated at $12mil)
‒ Potential tax leakage
‒ Timing of execution and complexity
Scenario 2: Exchange VOXX shares owned by Guitar for Auto + German Accessories + JVs
o Benefits
‒ Reduce overall share count through exchange of VOXX shares from Guitar
‒ Net proceeds from sale of Auto result in a cash surplus on the balance sheet (increasing VOXX’s equity
value), which can be used to grow the business, but could also be issued as a cash dividend / distribution
to VOXX shareholders
‒ “Clean” Premium Audio business will have flexibility for potential mergers / add-on transactions
o Considerations
‒ Incremental costs at PAC through additional corporate burden to standalone EBITDA
‒ Severance costs through elimination of corporate
‒ Potential tax leakage
Benefits / considerations to be discussed further live
DRAFT |
| 7 Private and Confidential
Illustrative Sum of the Parts Valuation - Sample Calculation
Premium Audio Company (PAC) FY 2025P Adj. EBITDA $25.1
Less: Illustrative Corporate EBITDA Burden as Standalone (a) (5.0)
Illustrative Standalone PAC Adj. EBITDA $20.1
EV / Adj. EBITDA Multiple 5.5 x
Illustrative Value of Standalone PAC $110.0
Plus: Value of Auto Aftermarket and OEM (Auto) (b) $50.0
Plus: Value of German Accessories (c) 10.0
Plus: Value of 50% Equity in ASA Electronics (c) 35.0
Plus: Value of VOXX's Equity in BioCenturion (c) 5.0
Less: Illustrative Costs to Eliminate Corporate (d) (12.0)
88.0
Illustrative Enterprise Value $198.0
Less: Net Debt ($17.0)
Illustrative Equity Value $181.0
Fully Diluted Shares Outstanding (e) 23.5
Illustrative Share Price $7.69
Share Price Based on Illustrative Sum of the Parts Analysis
Illustrative Value of Premium Audio Company (PAC)
$7.69 $65 $80 $95 $110 $125
$40 $5.35 $5.99 $6.63 $7.26 $7.90
$45 $5.56 $6.20 $6.84 $7.47 $8.11
$50 $5.78 $6.41 $7.05 $7.69 $8.32
$55 $5.99 $6.63 $7.26 $7.90 $8.54
Illustrative Value of Auto
$60 $6.20 $6.84 $7.47 $8.11 $8.75
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 8.31.24)”, “VOXX International – Capitalization Summary (as of 10.31.2024)” and publicly
available information.
a) Represents illustrative value of corporate burden that would still remain on the business after eliminating corporate division. Value to be refined upon further analysis.
b)Represents sale of Automotive OEM / Aftermarket for $50mil (5.1x FY 2026P Adj. EBITDA of $9.9mil).
c) Represents sale of 50% equity in ASA Electronics for $35mil (7.3x FY 2024A EBITDA of $9.6mil), sale of German Accessories for $10mil (4.8x. FY 2025B EBITDA of $2.1mil) and sale of VOXX’s 50%
equity in BioCenturion for $5mil. Assumes sale prices remain constant in each scenario.
d)Represents illustrative one-time cost to eliminate entire corporate segment. Value to be refined upon further analysis.
e) Includes 20.3mil Class A common stock, 2.3mil Class B common stock and 1.0mil RSUs as of October 31, 2024.
ILLUSTRATIVE SUM OF THE PARTS VALUATION – SCENARIO 1
(Amounts in Millions, except share price)
DRAFT
EV / Standalone
Adj. EBITDA: 3.2x 4.0x 4.7x 5.5x 6.2x
SALE IN 2 TRANSACTIONS ((AUTO + GERMAN ACCESSORIES + JVS) AND PAC))
1
2
3
4
Calculated based on values in boxes 1, 2, 3, 4 |
| 8 Private and Confidential
Exchange of VOXX Shares Owned by Guitar at:
$5.50 / share
Illustrative Enterprise Value of Remain Co
$150.46 $110 $125 $140 $155 $170
$40 $7.34 $8.22 $9.10 $9.98 $10.86
$45 $7.64 $8.51 $9.39 $10.27 $11.15
$50 $7.93 $8.81 $9.69 $10.56 $11.44
$55 $8.22 $9.10 $9.98 $10.86 $11.73
$60 $8.51 $9.39 $10.27 $11.15 $12.03
$65 $8.81 $9.69 $10.56 $11.44 $12.32
$70 $9.10 $9.98 $10.86 $11.73 $12.61
$75 $9.39 $10.27 $11.15 $12.03 $12.91
$80 $9.69 $10.56 $11.44 $12.32 $13.20
Illustrative Value of Auto
Exchange of VOXX Shares Owned by Guitar at:
$7.00 / share
Illustrative Enterprise Value of Remain Co
$137.53 $110 $125 $140 $155 $170
$40 $6.59 $7.47 $8.34 $9.22 $10.10
$45 $6.88 $7.76 $8.64 $9.51 $10.39
$50 $7.17 $8.05 $8.93 $9.81 $10.68
$55 $7.47 $8.34 $9.22 $10.10 $10.98
$60 $7.76 $8.64 $9.51 $10.39 $11.27
$65 $8.05 $8.93 $9.81 $10.68 $11.56
$70 $8.34 $9.22 $10.10 $10.98 $11.86
$75 $8.64 $9.51 $10.39 $11.27 $12.15
$80 $8.93 $9.81 $10.68 $11.56 $12.44
Illustrative Value of Auto
Remain Co Values - Sample Calculation
FY2025B Adj. EBITDA (excl. Auto) (a) $27.1
Less: Illustrative Corporate EBITDA Burden as Standalone (b) (5.0)
Illustrative Adj. EBITDA (excl. Auto) $22.1
EV / Adj. EBITDA Multiple 5.6 x
Total Enterprise Value (excl. Auto) $125.0
Plus: Net Cash Received from Sale Proceeds 41.5
Less: Net Debt (17.0)
Less: Illustrative Costs to Eliminate Corporate (e) (12.0)
Total Equity Value (excl. Auto) $137.5
New Fully Diluted Shares Outstanding 17.1
Illustrative Share Price $8.05
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 8.31.24)”, “VOXX International – Capitalization Summary (as of 10.31.2024)” and publicly
available information.
a) Represents $25.1mil of Adj. EBITDA from Premium Audio and $2.1mil of Adj. EBITDA from German Accessories.
b)Represents illustrative value of corporate burden that would still remain on the business after eliminating corporate division. Value to be refined upon further analysis.
c) Represents sale of Automotive OEM / Aftermarket for $50mil (5.1x FY 2026P Adj. EBITDA of $9.9mil).
d)Represents sale of 50% equity in ASA Electronics for $35mil (7.3x FY 2024A EBITDA of $9.6mil), and sale of VOXX’s 50% equity in BioCenturion for $5mil. Assumes sale prices remain constant in
each scenario.
e) Represents illustrative one-time cost to eliminate entire corporate segment. Value to be refined upon further analysis.
ILLUSTRATIVE SUM OF THE PARTS VALUATION – SCENARIO 2
DRAFT
(Amounts in Millions, except share price)
EXCHANGE VOXX SHARES OWNED BY GUITAR FOR AUTO + GERMAN ACCESSORIES + JVS
EV / Adj. EBITDA: 5.0x 5.6x 6.3x 7.0x 7.7x EV / Adj. EBITDA: 5.0x 5.6x 6.3x 7.0x 7.7x
Share Count / Proceeds - Sample Calculation
VOXX Fully Diluted Shares Outstanding 23.5
Less: Gentex Shares Purchased by VOXX (6.5)
New Fully Diluted Shares Outstanding 17.1
Sale of Auto
Plus: Sale of Automotive OEM / Aftermarket (c) $50.0
Plus: Sale of 50% Equity in ASA Electronics (d) 35.0
Plus: Sale of VOXX's Equity in BioCenturion (d) 5.0
Less: Exchange VOXX Shares Owned by Guitar at $7.00/share (48.5)
Total Net Cash Proceeds to VOXX $41.5 |
| 9 Private and Confidential
(Amounts in Millions, USD) Historical Budget Projected CAGR
FY 2021A FY 2022A FY 2023A FY 2024A FY 2025B FY 2026P FY '21-FY '26
Premium Audio $299.9 $344.0 $274.5 $237.9 $239.4 $268.0 (2.2%)
Automotive Aftermarket 117.7 135.6 101.8 84.1 77.2 90.0 (5.2%)
Automotive OEM 46.2 65.0 73.0 58.3 51.8 80.6 11.8%
European Accessory 33.1 33.5 33.1 43.6 36.5 39.8 3.8%
Corporate 0.7 0.5 0.4 (0.6) 0.2 0.2
Total Revenue $497.6 $578.6 $482.8 $423.3 $405.1 $478.6 (0.8%)
Growth 16.3% (16.6%) (12.3%) (4.3%) 18.1%
Premium Audio $92.2 $98.0 $72.0 $60.4 $72.3 $88.1 (0.9%)
Automotive Aftermarket 33.5 43.7 36.6 31.0 27.5 31.7 (1.1%)
Automotive OEM 5.8 3.6 5.8 (1.0) 4.9 15.6 21.8%
European Accessory 10.9 11.3 10.0 12.9 11.1 13.0 3.5%
Corporate 0.9 0.8 0.6 0.7 0.4 0.4
Total Gross Profit $143.4 $157.4 $125.1 $104.0 $116.2 $148.9 0.8%
Margin 28.8% 27.2% 25.9% 24.6% 28.7% 31.1%
Premium Audio $49.1 $42.2 $12.9 $8.9 $25.1 $39.7 (4.2%)
Automotive Aftermarket 12.4 16.4 12.1 8.2 5.3 8.1 (8.0%)
Automotive OEM (5.6) (11.2) (7.5) (13.0) (7.0) 1.8 NM
European Accessory 2.0 1.9 1.5 3.5 2.1 3.7 13.2%
Corporate (12.6) (9.6) (9.2) (9.9) (13.3) (14.1)
Total Adjusted EBITDA $45.3 $39.7 $9.8 ($2.4) $12.1 $39.2 (2.8%)
Growth (12.3%) (75.3%) NM NM 223.5%
Margin 9.1% 6.9% 2.0% NM 3.0% 8.2%
VOXX FINANCIAL SUMMARY
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 08.31.2024)”.
a) Represents EBITDA adjusted for non-recurring items.
(a)
DRAFT |
| 10 Private and Confidential
(Amounts in Millions, USD) Historical Budget Projected CAGR
FY 2021A FY 2022A FY 2023A FY 2024A FY 2025B FY 2026P FY '21-FY '26
Revenue $299.9 $344.0 $274.5 $237.9 $239.4 $268.0 (2.2%)
%Growth 14.7% (20.2%) (13.3%) 0.6% 11.9%
Gross Profit $92.2 $98.0 $72.0 $60.4 $72.3 $88.1 (0.9%)
% Margin 30.7% 28.5% 26.2% 25.4% 30.2% 32.9%
Adj. EBITDA $49.1 $42.2 $12.9 $8.9 $25.1 $39.7 (4.2%)
%Growth (14.1%) (69.5%) (30.8%) 180.8% 58.5%
%Margin 16.4% 12.3% 4.7% 3.8% 10.5% 14.8%
Adj. EBITDA Incl. Corporate Burden $44.3 $37.2 $7.2 $3.7 $22.0 $35.5 (4.4%)
% Margin 14.8% 10.8% 2.6% 1.5% 9.2% 13.2%
PAC FINANCIAL SUMMARY
Source: “FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 08.31.2024)”.
a) Represents EBITDA adjusted for non-recurring items.
b)Represents illustrative value of corporate burden that would still remain on the business after eliminating corporate division. Value to be refined upon further analysis.
(a)
DRAFT
(b) |
| Private and Confidential
AN AFFILIATE OF
PROJECT INSTRUMENT
BOARD DISCUSSION MATERIALS
DECEMBER 13, 2024
Exhibit (c)(iv) |
| 11 Private and Confidential
TABLE OF CONTENTS
SECTION I EXECUTIVE SUMMARY
SECTION II VIOLIN MARKET DATA
SECTION III VIOLIN FINANCIAL OVERVIEW
SECTION IV VALUATION |
| 22 Private and Confidential
DISCLAIMER
The following pages contain materials provided to the Transaction Committee (the “Committee") of VOXX International Corporation (the "Company") by
Solomon Partners Securities, LLC (“Solomon”) in connection with Project Instrument. These materials were prepared on a confidential basis in connection
with an oral presentation to the Committee and not with a view to public disclosure or toward complying with the disclosure standards under state or
federal securities laws or other laws, rules or regulations. These materials are for use by the Committee in its evaluation of the proposed transaction and may
not be used or relied upon for any other purpose or disclosed to any third party or circulated or referred to publicly without Solomon's prior written consent.
The information contained in this presentation was based solely on publicly available information or historical financial information, forecasts and other
information furnished to Solomon, and approved for its use, by the Committee. Solomon has relied, without independent investigation or verification, on the
accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether
written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections
provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections
contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of Solomon, its affiliates or its or
their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the
accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. Solomon, its affiliates and its and their
respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information,
projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should
not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation
does not constitute a representation by Solomon that such information will be updated at any time after the date of the presentation. Solomon has not
assumed any responsibility for or performed any independent valuation or appraisal of the assets or liabilities of the Company, the potential effects of
volatility in the credit, financial and stock markets on the Company or any other party to the transaction, or the impact of the proposed transaction on the
solvency or viability of the Company or any other party to the transaction, and the information herein does not necessarily reflect the prices at which
businesses or securities actually may be sold.
Neither Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Committee acknowledges that
Solomon is an affiliate of Natixis, a global full service commercial and investment bank.
These materials are not and should not be construed as a fairness opinion. The information herein does not constitute a recommendation to the
Committee, any security holder of the Company or any other person as to how to vote or act with respect to the proposed transaction or any other matter.
The information herein, including this disclaimer, is subject to, and governed by, any written agreement between the Company and the Committee, on the
one hand, and Solomon, on the other hand. |
| SECTION I – EXECUTIVE SUMMARY |
| 44 Private and Confidential
• On 5/31/2024, Violin received an unsolicited confidential offer from Guitar to acquire the remaining shares of Violin for $5.50 per
share
• On 6/17/2024, the Transaction Committee was formed to oversee the evaluation of strategic alternatives
• On 8/12/2024, Solomon began reaching out to potential buyers
• On 8/27/2024, Guitar publicly announced its acquisition of additional shares from Beat Kahli, also prompting the public
announcement of the strategic alternatives process
‒ Guitar previously acquired shares in 2 tranches (October 2023 and January 2024)
• On 9/5/2024, Violin announced the successful sale of its Domestic Accessory business and its Jamo and Energy brands, noting that
proceeds will be used to pay down debt
• Solomon ran a highly robust process, contacting over 90 parties comprising both strategic and financial buyers, including any
inbound parties that demonstrated interest after the public announcement of the strategic alternatives process
• On 9/26/2024, Solomon received initial proposals from 5 parties; 4 parties proposed acquiring the entire company and 1 party
proposed acquiring Premium Audio
• On 11/14/2024, Solomon received and heavily negotiated final bids from 2 parties to acquire the entire company
• Final value of $7.50 per share represents 163% premium to the unaffected stock price of $2.85(a)
‒ Represents an Enterprise Value / Adj. EBITDA multiple of 156.6x FY 2025B Adj. EBITDA of $1.3mil(b)
• As a current ~30% shareholder, Guitar is also a related-industry strategic buyer of Violin
• Potential considerations if a transaction is not completed:
‒ Stock price could return to unaffected stock price levels
‒ Market reaction to recent and expected poor financial performance
‒ Near-term operational risk from further execution of cost-cutting initiatives and upcoming ERP transition
‒ Macroeconomic headwinds (potential increased tariffs, soft consumer and automotive industries)
EXECUTIVE SUMMARY
a) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Adj. EBITDA of $1.3mil reflects 12-09-24 FY 2025B forecast. $7.50 per share represents a 16.2x EV / Adj. EBITDA multiple using 10-04-24 FY 2025B forecasted EBITDA of
$12.1mil set forth on pg. 8. |
| 55 Private and Confidential
• 93 total parties were contacted beginning 8/12/2024, comprising
45 strategics and 48 financial sponsors
• Initial bids received on 9/26/24 from 5 parties – 4 WholeCo,
1 Premium Audio only
‒ Invited 4 parties to continue diligence
‒ Distributed downward-revised 2025B and 2026P financials on
10/10/24(a)
‒ 2 parties dropped out shortly before scheduled management
meetings, citing downward revision of budget (specifically
lack of stabilization in Premium Audio), timeline / planning
concerns, additional required post-close discovery work and
elevated stock price
• Final bids received from 2 parties on 11/14/24, both parties later
submitted revised offers
‒ Piano ($7.20 per share)(b)
▪ Bid $7.16 per share on 9/26/24
▪ Bid $6.00 per share on 11/14/24
▪ Bid $7.20 per share on 11/19/2024(b)
‒ Guitar ($7.50 per share)
▪ Bid $5.50 per share on 5/31/24
▪ Bid $6.50 per share on 9/26/24
▪ Bid $7.00 per share on 11/14/24
▪ Bid $7.50 per share on 12/13/24
DETAILED PROCESS OVERVIEW
a) Solomon distributed further downward-revised 2025B financials from Management on 12/9/24 and discussed with buyers that Management no longer supports
achieving previously forecasted FY 2026P figures.
b)Revised offer represents a $7.20 per share acquisition of 100% of Violin. Offer is predicated on Violin selling its 50% stake in the ASA JV for a minimum value.
Outreach Summary
32
CIMs Sent
Parties Contacted
93
18
Data Room Access
Bids
5
IOIs Received
Final Bids
Received
2
CIM Data Room
Strategic 11 5
Sponsor 21 13
Total 32 18 |
| 66 Private and Confidential
SELECTED TRANSACTION TERMS
Note: Violin’s fiscal year ends on the last day of February.
a) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as provided
by the Company.
c) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
Acquiror Guitar
Acquiror Ownership 28.7% of common shares outstanding; 100% ownership of GalvanEyes, who owns a 50% stake of
BioCenturion JV
Structure Acquire 100% of the remaining Class A and Class B common stock of Violin not owned by Acquiror
(17.1 million shares)
Purchase Price Per Share $7.50 per outstanding share in cash
Offer Premium to
Unaffected Stock Price (a) 163.2%
Implied Equity Value (b) $176.6 million
Implied Enterprise Value (c) $196.4 million
Financing
• Cash on hand and cash available via existing revolving credit facility
• Agreed to acquire 17.1 million shares of Class A and Class B common stock for $128.1 million plus
the assumption of net debt of $19.8 million(c) and other contractual liabilities per merger
agreement
Conditions and Approvals Controlling shareholders will enter into voting and support agreements in favor of the potential
transaction
Go-Shop Period No go-shop period
Termination Fee $7.5mil (3.8% of Enterprise Value)
Termination Date 6 Months
Key Dates to Closing
• Sign: December 13/14
• HSR Filing Deadline: December 30
(10 business days after signing)
• File Preliminary Proxy Statement with SEC:
January 10
• HSR Waiting Period End: January 29
• Mail Proxy Statement: February 21 – 28
• Shareholder Meeting: March 13 – 20
• Close: March 24 – 28 |
| 77 Private and Confidential
TRANSACTION PRICE ANALYSIS
Source: Capital IQ and Management provided information as of December 11, 2024; totals
may not foot due to rounding.
Note: Violin’s fiscal year ends on the last day of February.
a) Unaffected stock price represents stock price on 8/26/2024, the day before 8/27/2024
public announcement of strategic alternatives process. All financials included in
enterprise value calculation represent financials as of May 31, 2024 as represented in
the FY Q1 2025 10-Q. Does not include negative non-controlling interest of ($39.4mil) as
of May 31, 2024.
b)Shares outstanding as of October 31, 2024. Class A shares are entitled to one vote per
share. Source: Company provided information.
c) Shares outstanding as of October 31, 2024. Class B shares are entitled to ten votes per
share. Class B shares are entirely owned by Violin’s founder, John Shalam, and his
family. Source: Company provided information.
d)As of October 31, 2024. Source: Company provided information.
e) Does not include negative non-controlling interest of ($40.6mil) as of August 31, 2024.
Comprises ($4.0mil) of redeemable non-controlling interest related to Onkyo
acquisition and ($36.6mil) of non-controlling interest related to EyeLock.
f) Represents payments due upon a change-in-control. Source: Company provided
information.
g)Source: Capital IQ as of December 11, 2024. Volume-weighted average closing price for
the 90 most recent trading days from August 6, 2024 to December 11, 2024.
h)Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory,
EyeLock and BioCenturion)(Updated FY25_12.09.24) as provided to Solomon Partners
on December 9, 2024, and approved for its use by the Committee. Financials include
actual figures through October 31, 2024 and actual sales for November 2024.
i) Note: Excludes ~($0.4mil) of negative equity income in BioCenturion JV in FY 2025B.
BioCenturion JV is a 50/50 partnership between EyeLock, a majority-owned subsidiary
of Violin, and GalvanEyes.
(Amounts in Millions USD, Except Per Share Data) Unaffected Proposed
Stock Price (a) Offer Price
Stock Price $2.85 $7.50
Class A Shares Outstanding 20.2 20.3 (b)
Class B Shares Outstanding 2.3 2.3 (c)
Restricted Stock Units -- 1.0 (d)
Diluted Shares Outstanding 22.5 23.5
Total Equity Value $64.1 $176.6
Plus: Debt $67.8 $20.1 (d)
Less: Cash (4.2) (3.1) (d)
Plus: Non-controlling Interest -- -- (e)
Plus: Change-in-Control Payments -- 2.8 (f)
Total Enterprise Value $127.7 $196.4
Premium / (Discount) to:
Close On 12/11/2024 $7.41 (61.5) % 1.2 %
Unaffected Stock Price (a) 2.85 -- 163.2
Guitar Original Offer On 5/31/2024 5.50 (48.2) 36.4
90 Trading Day VWAP (g) 4.94 (42.4) 51.7
1-Year Median 6.92 (58.8) 8.4
1-Year High 11.45 (75.1) (34.5)
1-Year Low 2.32 22.8 223.3
Enterprise Value as a Multiple of:
Adjusted EBITDA - Management (h)(i) FY 2025B $1.3 156.6 x |
| 88 Private and Confidential
$17.1
$12.1
$1.3
08-15-24 Forecast (a) 10-04-24 Forecast (b) 12-09-24 Forecast (c)
$408.9 $405.1 $375.9
08-15-24 Forecast (a) 10-04-24 Forecast (b) 12-09-24 Forecast (c)
CHANGES TO MANAGEMENT FY 2025 BUDGET OVER TIME
Note: Violin’s fiscal year ends on the last day of February.
a) Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)", as provided to Solomon Partners on August 15,
2024, and approved for its use by the Committee. Financials include actual
figures through June 30, 2024 and actual sales figures for July 2024.
b)Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)(as of 8.31.24)", as provided to Solomon Partners on
October 4, 2024, and approved for its use by the Committee. Financials include
actual figures through August 31, 2024.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic
Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)”, as provided to
Solomon Partners on December 9, 2024, and approved for its use by the
Committee. Financials include actual figures through October 31, 2024 and
actual sales figures for November 2024.
NET SALES
ADJUSTED EBITDA
($33.0) (8.1%)
($15.8) (92.7%) |
| 99 Private and Confidential
Premium / (Discount) to EV / FY 2025B Adjusted EBITDA EV / Adjusted EBITDA
Unaffected Current 1-Year 1-Year 1-Year FY 2025B FY 2025B FY 2025B
Stock Stock Price Stock Price Average High Low Equity Enterprise 8/15/2024 10/4/2024 12/9/2024
Price $2.85 $7.41 $6.45 $11.45 $2.32 Value Value $17.1 $12.1 $1.3
$2.85 -- (62%) (56%) (75%) 23% $67 $87 5.1 x 7.2 x 69.3 x
$5.50 93% (26%) (15%) (52%) 137% $130 $149 8.7 x 12.3 x 119.0 x
$6.00 111% (19%) (7%) (48%) 159% $141 $161 9.4 x 13.3 x 128.4 x
$6.50 128% (12%) 1% (43%) 180% $153 $173 10.1 x 14.3 x 137.8 x
$7.00 146% (6%) 9% (39%) 202% $165 $185 10.8 x 15.2 x 147.2 x
$7.25 154% (2%) 12% (37%) 213% $171 $190 11.1 x 15.7 x 151.9 x
$7.50 163% 1% 16% (34%) 223% $177 $196 11.5 x 16.2 x 156.6 x
$7.75 172% 5% 20% (32%) 234% $182 $202 11.8 x 16.7 x 161.3 x
$8.00 181% 8 % 24% (30%) 245% $188 $208 12.2 x 17.2 x 166.0 x
$8.25 189% 11% 28% (28%) 256% $194 $214 12.5 x 17.7 x 170.6 x
$8.50 198% 15% 32% (26%) 266% $200 $220 12.9 x 18.1 x 175.3 x
$8.75 207% 18% 36% (24%) 277% $206 $226 13.2 x 18.6 x 180.0 x
$9.00 216% 21% 40% (21%) 288% $212 $232 13.6 x 19.1 x 184.7 x
$10.00 251% 35% 55% (13%) 331% $235 $255 14.9 x 21.1 x 203.5 x
Note: Violin’s fiscal year ends on the last day of February.
a) Current stock price, 1-year average, high and low as of December 11, 2024.
b)Represents EBITDA adjusted for non-recurring items.
c) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to
August 27 public announcement of strategic alternatives process).
d)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of
October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
e) Enterprise value calculated as equity value plus net debt of $19.8mil as of October
31, 2024 (total debt of $20.1mil plus $2.8mil of change-in-control payments less
$3.1mil of cash). Enterprise value does not include negative non-controlling interest
of ($40.6mil) as of August 31, 2024.
f) Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)", as provided to Solomon Partners on August 15, 2024,
and approved for its use by the Committee. Financials include actual figures
through June 30, 2024 and actual sales figures for July 2024.
g)Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)(as of 8.31.24)", as provided to Solomon Partners on
October 4, 2024, and approved for its use by the Committee. Financials include
actual figures through August 31, 2024.
h)Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic
Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to
Solomon Partners on December 9, 2024, and approved for its use by the
Committee. Financials include actual figures through October 31, 2024 and actual
sales for November 2024.
ILLUSTRATIVE ANALYSIS AT VARIOUS PRICES
(Amounts in Millions USD, except per share data)
EXCLUDES DOMESTIC ACCESSORY AND EYELOCK / BIOCENTURION FINANCIALS
Guitar
Offer
(d)
(c)
(e)
(a) (b)
(f) (g) (h) |
| SECTION II – VIOLIN MARKET DATA |
| 1111 Private and Confidential
--
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24
--
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24
5/14/24: Violin
reported declining
YoY full-year
financial results
Affected
Stock
Price(b)
Affected Stock Price(b)
YEAR-TO-DATE
LAST 5 YEARS
VIOLIN STOCK PRICE PERFORMANCE
Source: Capital IQ as of December 11, 2024.
Note: Stock price Highs, Medians, and Lows calculated using daily close prices.
a) Stock price on 8/26/2024, the day before 8/27/2024 public announcement of strategic alternatives.
b)Represents trading after Violin’s announcement of strategic alternatives on 8/27/24.
c) Represents inflated trading range from March 2020 to July 2021 due to improved financial performance driven by COVID-related macroeconomic tailwinds.
5-Yr Median: $9.07
3-Yr Median: $8.80
1-Yr Median: $6.92
YTD Median: $6.63
Unaffected: $2.85(a)
8/27/24: Violin announced
evaluation of strategic
alternatives
Offer: $7.50
5/31/24: Guitar confidentially
submitted offer to the Board of $5.50
per share to acquire 100% of Violin
Price Date
High $10.85 1/9/2024
Low $2.32 8/5/2024
6-Mo Median: $5.87
Offer: $7.50
Price Date
High $27.18 2/17/2021
Low $1.83 3/20/2020
Unaffected: $2.85(a)
1/9/24: Violin reported declining
YoY Q3 financial results and
settlement of Seaguard
arbitration for $42mil
5/14/24: Violin reported
declining YoY full-year
financial results
COVID–Affected Trading(c) |
| 1212 Private and Confidential
VIOLIN BENEFICIAL OWNERSHIP BY CATEGORY
Source: Capital IQ and public filings as of December 11, 2024.
Note: Does not include 1.0mil of Restricted Stock Units as of October 31, 2024.
Class A Class B Total Percent Percent
Ownership Ownership Ownership Ownership Vote
Guitar 6.5 -- 6.5 28.7% 15.1%
Shalam Family 1.9 2.3 4.2 18.6% 57.2%
Other Insiders 0.8 -- 0.8 3.5% 1.8%
Top 10 Institutions 4.5 -- 4.5 20.0% 10.5%
Public and Other 6.6 -- 6.6 29.2% 15.3%
Total 20.3 2.3 22.5 100.0% 100.0%
(Amounts in Millions) |
| SECTION III – VIOLIN FINANCIAL OVERVIEW |
| 1414 Private and Confidential
(Amounts in Millions USD, Except Per Share Data)
Historical Projected
Fiscal Year Ending February 28, LTM Fiscal Year
Income Statement Data (a) 2021A 2022A 2023A 2024A Nov-24 2025B
Net Sales $497.6 $578.6 $482.8 $423.3 $368.8 $375.9
Gross Profit 143.4 157.4 125.1 104.0 92.5 103.7
Adjusted EBITDA 45.3 39.7 9.8 (2.4) (8.2) 1.3
Adjusted EBIT 34.9 28.1 (2.2) (14.0) (19.0) (9.5)
Margins
Gross Margin 28.8% 27.2% 25.9% 24.6% 25.1% 27.6%
Adjusted EBITDA 9.1 6.9 2.0 N M N M 0.3
Adjusted EBIT 7.0 4.9 N M N M N M N M
Growth Rates
Net Sales 16.3% (16.6%) (12.3%) (17.5%) (11.2%)
Gross Profit 9.8 (20.5) (16.9) (20.7) (0.3)
Adjusted EBITDA (12.3) (75.3) N M N M N M
Adjusted EBIT (19.3) N M N M N M N M
Balance Sheet and Cash Flow Data
Cash & Cash Equivalents $59.4 $27.5 $5.7 $10.7 $3.1
Total Debt (6.5) (12.2) (38.0) (72.4) (20.1)
Depreciation and Amortization 10.4 11.6 12.0 11.6 10.9 $10.7
Capital Expenditures 2.9 3.8 3.5 2.6 6.6
CONSOLIDATED HISTORICAL AND PROJECTED FINANCIALS
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” and “FY 2021-2025 Quarterly
Balance Sheets (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 8.31.24)”, as provided to Solomon Partners on December 9, 2024 and October 29, 2024,
respectively, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales figures for November 2024.
Note: Violin’s fiscal year ends on the last day of February. Financials exclude Domestic Accessory, EyeLock and BioCenturion. Excludes ~($0.4mil) of negative equity income
in BioCenturion JV in FY 2025B.
a) Adjusted to exclude certain non-recurring and extraordinary items.
b)Represents figures as of October 31, 2024. Source: Company provided information. Does not include $2.8mil of change-in-control payments as of October 31, 2024.
(b)
(b) |
| 1515 Private and Confidential
HISTORICAL AND PROJECTED FINANCIALS BY SEGMENT
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales figures for
November 2024.
Note: Violin’s fiscal year ends on the last day of February. Financials exclude Domestic Accessory, EyeLock and BioCenturion. Excludes ~($0.4mil) of negative equity income
in BioCenturion JV in FY 2025B.
a) Adjusted to exclude certain non-recurring and extraordinary items.
(a)
(Amounts in Millions USD) Historical Budget CAGR
FY 2021A FY 2022A FY 2023A FY 2024A FY 2025B FY '21-FY '25
Premium Audio $299.9 $344.0 $274.5 $237.9 $221.1 (5.9%)
Automotive Aftermarket 117.7 135.6 101.8 84.1 74.8 (8.7%)
Automotive OEM 46.2 65.0 73.0 58.3 46.1 (0.0%)
European Accessory 33.1 33.5 33.1 43.6 33.7 0.4%
Corporate 0.7 0.5 0.4 (0.6) 0.3
Total Revenue $497.6 $578.6 $482.8 $423.3 $375.9 (5.5%)
Growth 16.3% (16.6%) (12.3%) (11.2%)
Premium Audio $92.2 $98.0 $72.0 $60.4 $62.7 (7.4%)
Automotive Aftermarket 33.5 43.7 36.6 31.0 27.0 (4.2%)
Automotive OEM 5.8 3.6 5.8 (1.0) 3.6 (9.2%)
European Accessory 10.9 11.3 10.0 12.9 10.0 (1.8%)
Corporate 0.9 0.8 0.6 0.7 0.4
Total Gross Profit $143.4 $157.4 $125.1 $104.0 $103.7 (6.3%)
Margin 28.8% 27.2% 25.9% 24.6% 27.6%
Premium Audio $49.1 $42.2 $12.9 $8.9 $16.6 (19.5%)
Automotive Aftermarket 12.4 16.4 12.1 8.2 5.0 (16.5%)
Automotive OEM (5.6) (11.2) (7.5) (13.0) (7.8) NM
European Accessory 2.0 1.9 1.5 3.5 0.9 (14.6%)
Corporate (12.6) (9.6) (9.2) (9.9) (13.5)
Total Adjusted EBITDA $45.3 $39.7 $9.8 ($2.4) $1.3 (51.2%)
Growth (12.3%) (75.3%) NM NM
Margin 9.1% 6.9% 2.0% NM 0.3% |
| SECTION IV – VALUATION |
| 1717 Private and Confidential
$3
$7
$121
$74
$6
$15
$212
$289
$0 $50 $100 $150 $200 $250 $300
Selected Public Companies
(EV / FY 2025B Adj. EBITDA) (c)
Selected Precedent Transactions
(EV / FY 2025B Adj. EBITDA) (d)
Sum-of-the-Parts
Break-Up Sale Analysis (e)
52-Week Trading Range
SUMMARY VALUATION OVERVIEW
Source: Company provided information.
Note: Violin FY 2025B figures used to represent CY 2024E figures, as Violin’s fiscal year ends on the last day of February.
Note: “NM” (Not Meaningful) data points reflect negative implied equity values per share.
a) Unaffected stock price represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
c) Assumes FY 2025B Adj. EBITDA multiple of 2.6x – 5.2x. Implied equity value per share is NM due to net debt of $19.8mil exceeding implied enterprise value. Using now-superseded
10-04-24 Forecast set forth on pg. 8 (which was subsequently lowered by Management on 12-09-24), implied equity value per share range would have been $0.52 to $1.82.
d)Assumes FY 2025B Adj. EBITDA multiple of 5.5x – 11.8x. Implied equity value per share is NM due to net debt of $19.8mil exceeding implied enterprise value. Using now-superseded
10-04-24 Forecast set forth on pg. 8 (which was subsequently lowered by Management on 12-09-24), implied equity value per share range would have been $1.99 to $5.26.
e) See pg. 22 for further detail; reflects fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of
October 31, 2024, as provided by the Company.
f) Represents trading range between Violin’s release of declining FY 2024 financial results on May 14, 2024 and Violin’s public announcement of the strategic alternatives process on
August 27, 2024.
Offer Price
$7.50
Unaffected Stock Price(a)
$2.85
(Amounts in Millions USD, Except Per Share Data) Implied Enterprise Value
Implied Equity Value Per Share
Legend
Implied Equity Value Per Share: $0.00 $1.28 $3.41 $5.53 $7.65 $9.78 $11.90
Implied Enterprise Value: $19.8
$4.29 $8.18
$2.32 $11.45
NM NM
NM NM
Net
Debt(b)
$4.53
$126
Trading Range
(5/15/24-8/26/24)(f) |
| 1818 Private and Confidential
5.2 x
4.5 x
2.6 x
--
2.0x
4.0x
6.0x
8.0x
Visteon B&O Tokai Rika
$2,440 $148 $892
12% 9% 8%
9% 41% (19%)
EV / EBITDA
SELECTED PUBLIC COMPANIES
Source of company historical financials: Company public filings and Capital IQ as of December 11, 2024.
Source of company projected financials: Median Wall Street analyst estimates per Capital IQ as of December 11, 2024, calendarized where applicable to conform to a December fiscal year end.
a) Figures converted to USD using 0.14 DKK/USD exchange rate as of December 11, 2024. EBITDA adjusted for IFRS leases to be on a more comparable basis with U.S. GAAP.
b)Figures converted to USD using 0.01 JPY/USD exchange rate as of December 11, 2024.
CY 2024E Median: 4.5x
Enterprise Value ($M):
CY 2024 EBITDA Margin:
(a)
EV / CY 2024E EBITDA
CY 2024 EBITDA Growth:
(b) |
| 1919 Private and Confidential
SUMMARY VALUATION BASED ON SELECTED PUBLIC COMPANIES
Note: Violin’s fiscal year ends on the last day of February.
a) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales for November
2024.
d)Violin FY 2025B figures represent CY 2024E figures, as Violin’s fiscal year ends on the last day of February. Multiples are on a calendar-year basis.
(Amounts in Millions USD, Except Per Share Data) Valuation Implied Less: Implied Implied Per
Multiples Enterprise Value Net Debt (a) Equity Value Share Value (b)
FY 2025B Adj. EBITDA (c) (d) $1.3 2.6 x - 5.2 x $3.3 - $6.5 ($19.8) NM NM NM NM |
| 2020 Private and Confidential
Source: SEC filings, public documents and news articles.
a) Converted to USD using 1.13 EUR/USD exchange rate at time of transaction announcement.
SELECTED PRECEDENT TRANSACTIONS
(a)
(Amounts in Millions USD)
Date
Announced Acquiror Target
Enterprise
Value
LTM EBITDA
Multiple
Dec-21 CCL Industries McGavigan Holdings $106 7.2 x
Feb-20 VOXX International Vehicle Safety Holding Corp. $17 5.5 x
Jul-19 Focusrite Pro Audio (ADAM Audio) $20 10.6 x
Nov-16 Samsung Electronics Harman International Industries $8,341 10.2 x
Aug-16 Mill Road Capital Skullcandy $155 11.8 x |
| 2121 Private and Confidential
SUMMARY
VALUATION BASED ON SELECTED PRECEDENT TRANSACTIONS
Note: Violin’s fiscal year ends on the last day of February.
a) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales for November
2024.
d)Violin FY 2025B Adj. EBITDA is used due to EBITDA being negative on an LTM basis.
(Amounts in Millions USD, Except Per Share Data) Valuation Implied Less: Implied Implied Per
Multiples Enterprise Value Net Debt (a) Equity Value Share Value (b)
FY 2025B Adj. EBITDA (c) (d) $1.3 5.5 x - 11.8 x $6.9 - $14.8 ($19.8) NM NM NM NM |
| 2222 Private and Confidential
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock
and BioCenturion)(Updated FY25_12.09.24)”, as provided to Solomon Partners on December 9,
2024, and approved for its use by the Committee, and other Company provided information.
a) Low-end of valuation multiples based on EV / CY2024E EBITDA multiple of comparable
company, Bang and Olufsen (as detailed on pg. 18). Mid- to high-end of valuation multiples
based on market tests and discussions with Management and reflects the judgement and
experience of Solomon Partners.
b)Comprises Automotive OEM, Automotive Aftermarket and German Accessories segments.
Valuation range based on market tests and discussions with Management and reflects the
judgement and experience of Solomon Partners.
c) Represents Corporate EBITDA burden excluding the $3.5mil of equity income received from
ASA JV. Multiple of 2.0x is a proxy for illustrative severance and transition / wind down costs.
Assumes NY Headquarters would be sold with the elimination of Corporate / Shared Services
and net proceeds would reduce illustrative severance and transition / wind down costs. NY
Headquarters valuation range of $8mil to $12mil based on JLL appraisal values.
d)Represents sale of 50% equity interest in ASA Electronics joint venture. EBITDA represents
$3.5mil of equity income received from ASA JV, which is included within the Corporate EBITDA
burden on a consolidated basis. Valuation multiples based on offers, market tests and
discussions with Management and reflects the judgement and experience of Solomon Partners.
Valuation range calculated as equity income multiplied by EV / EBITDA multiples plus 50% of
the $20mil in excess cash on ASA’s balance sheet.
e) Excludes ~($0.4mil) of negative equity income in BioCenturion JV in FY 2025B. BioCenturion JV
is a 50/50 partnership between EyeLock, a majority-owned subsidiary of Violin, and GalvanEyes.
Guitar purchased 100% of GalvanEyes equity in BioCenturion on 8/27/2024 in the form of a 10-
year earnout with a maximum total payment of $8mil. There is an additional potential total
earnout of $7mil in the 5 years proceeding the 10-year period, if the $8mil earnout is achieved
within the 10-year period. Valuation range based on 50% of the maximum total earnout of $8mil
in the 10-year period and reflects the judgement and experience of Solomon Partners.
f) Net debt assumes $20.1mil of debt, $3.1mil of cash and $2.8mil of change-in-control payments
as of October 31, 2024. Source: Company provided information.
g)Does not include negative non-controlling interest of ($40.6mil) as of August 31, 2024.
Comprises ($4.0mil) of redeemable non-controlling interest related to Onkyo acquisition and
($36.6mil) of non-controlling interest related to EyeLock.
h)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31,
2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as provided by the Company.
SUM-OF-THE-PARTS BREAK-UP SALE ANALYSIS
Execution, timing, stranded costs, financial performance, buyer landscape, market sentiment, public disclosure, tax leakage
Potential Risks
Does not reflect any analysis
of potential tax impacts
(Amounts in Millions USD, except per share data) Sum-of-the-Parts Break-Up Sale Analysis (EV / FY 2025B Adjusted EBITDA)
FY 2025B
Multiple
(TEV / Adj. EBITDA) Valuation
Segment Adj. EBITDA Low - Mid - High Low - Mid - High
Premium Audio (a) $16.6 5.0 x - 6.5 x - 8.0 x $82.8 - $107.7 - $132.5
Automotive OEM / Aftermarket and German Accessories (b) (1.8) N M N M N M 40.0 - 50.0 - 60.0
Total Segment-Level $14.7 8.3 x - 10.7 x - 13.1 x $122.8 - $157.7 - $192.5
Less: Corporate Expenses
(incl. Net Proceeds from Sale of NY Headquarters) (c)
($16.9) 2.0 x 2.0 x 2.0 x ($25.9) - ($23.9) - ($21.9)
Total Whole Co. ($2.2) N M N M N M $97.0 - $133.8 - $170.7
Equity in ASA Electronics Joint Venture (d) $3.5 4.0 x - 6.0 x - 8.0 x $23.8 - $30.7 - $37.6
Equity in BioCenturion Joint Venture (e) N M N M N M N M -- - 2.0 - 4.0
Total Whole Co. (incl. ASA and BioCenturion) $1.3 96.3 x - 132.8 x - 169.3 x $120.8 - 166.6 - $212.3
Less: Debt (f) ($20.1) ($20.1) ($20.1)
Plus: Cash (f) 3.1 3.1 3.1
Less: Change-in-Control Payments (f) (2.8) (2.8) (2.8)
Plus: Non-Controlling Interest (g) -- -- --
Equity Value $101.0 - $146.8 - $192.5
Fully Diluted Shares Outstanding (h) 23.5 23.5 23.5
Implied Share Price $4.29 - $6.23 - $8.18
Offer Price $7.50 $7.50 $7.50
% Premium / (Discount) of Offer Price to Implied Share Price 74.8% - 20.3% - (8.3%) |
| Private and Confidential
AN AFFILIATE OF
PROJECT INSTRUMENT
BOARD DISCUSSION MATERIALS
DECEMBER 17, 2024
Exhibit (c)(v) |
| 11 Private and Confidential
TABLE OF CONTENTS
SECTION I EXECUTIVE SUMMARY
SECTION II VIOLIN MARKET DATA
SECTION III VIOLIN FINANCIAL OVERVIEW
SECTION IV VALUATION |
| 22 Private and Confidential
DISCLAIMER
The following pages contain materials provided to the Transaction Committee (the “Committee") of VOXX International Corporation (the "Company") by
Solomon Partners Securities, LLC (“Solomon”) in connection with Project Instrument. These materials were prepared on a confidential basis in connection
with an oral presentation to the Committee and not with a view to public disclosure or toward complying with the disclosure standards under state or
federal securities laws or other laws, rules or regulations. These materials are for use by the Committee in its evaluation of the proposed transaction and may
not be used or relied upon for any other purpose or disclosed to any third party or circulated or referred to publicly without Solomon's prior written consent.
The information contained in this presentation was based solely on publicly available information or historical financial information, forecasts and other
information furnished to Solomon, and approved for its use, by the Committee. Solomon has relied, without independent investigation or verification, on the
accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether
written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections
provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections
contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of Solomon, its affiliates or its or
their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the
accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. Solomon, its affiliates and its and their
respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information,
projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should
not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation
does not constitute a representation by Solomon that such information will be updated at any time after the date of the presentation. Solomon has not
assumed any responsibility for or performed any independent valuation or appraisal of the assets or liabilities of the Company, the potential effects of
volatility in the credit, financial and stock markets on the Company or any other party to the transaction, or the impact of the proposed transaction on the
solvency or viability of the Company or any other party to the transaction, and the information herein does not necessarily reflect the prices at which
businesses or securities actually may be sold.
Neither Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Committee acknowledges that
Solomon is an affiliate of Natixis, a global full service commercial and investment bank.
These materials are not and should not be construed as a fairness opinion. The information herein does not constitute a recommendation to the
Committee, any security holder of the Company or any other person as to how to vote or act with respect to the proposed transaction or any other matter.
The information herein, including this disclaimer, is subject to, and governed by, any written agreement between the Company and the Committee, on the
one hand, and Solomon, on the other hand. |
| SECTION I – EXECUTIVE SUMMARY |
| 44 Private and Confidential
• On 5/31/2024, Violin received an unsolicited confidential offer from Guitar to acquire the remaining shares of Violin for $5.50 per
share
• On 6/17/2024, the Transaction Committee was formed to oversee the evaluation of strategic alternatives
• On 8/12/2024, Solomon began reaching out to potential buyers
• On 8/27/2024, Guitar publicly announced its acquisition of additional shares from Beat Kahli, also prompting the public
announcement of the strategic alternatives process
‒ Guitar previously acquired shares in 2 tranches (October 2023 and January 2024)
• On 9/5/2024, Violin announced the successful sale of its Domestic Accessory business and its Jamo and Energy brands, noting that
proceeds will be used to pay down debt
• Solomon ran a highly robust process, contacting over 90 parties comprising both strategic and financial buyers, including any
inbound parties that demonstrated interest after the public announcement of the strategic alternatives process
• On 9/26/2024, Solomon received initial proposals from 5 parties; 4 parties proposed acquiring the entire company and 1 party
proposed acquiring Premium Audio
• On 11/14/2024, Solomon received and heavily negotiated final bids from 2 parties to acquire the entire company
• Final value of $7.50 per share represents 163% premium to the unaffected stock price of $2.85(a)
‒ Represents an Enterprise Value / Adj. EBITDA multiple of 156.6x FY 2025B Adj. EBITDA of $1.3mil(b)
• As a current ~30% shareholder, Guitar is also a related-industry strategic buyer of Violin
• Potential considerations if a transaction is not completed:
‒ Stock price could return to unaffected stock price levels
‒ Market reaction to recent and expected poor financial performance
‒ Near-term operational risk from further execution of cost-cutting initiatives and upcoming ERP transition
‒ Macroeconomic headwinds (potential increased tariffs, soft consumer and automotive industries)
EXECUTIVE SUMMARY
a) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Adj. EBITDA of $1.3mil reflects 12-09-24 FY 2025B forecast. $7.50 per share represents a 16.2x EV / Adj. EBITDA multiple using 10-04-24 FY 2025B forecasted EBITDA of
$12.1mil set forth on pg. 8. |
| 55 Private and Confidential
• 93 total parties were contacted beginning 8/12/2024, comprising
45 strategics and 48 financial sponsors
• Initial bids received on 9/26/24 from 5 parties – 4 WholeCo,
1 Premium Audio only
‒ Invited 4 parties to continue diligence
‒ Distributed downward-revised 2025B and 2026P financials on
10/10/24(a)
‒ 2 parties dropped out shortly before scheduled management
meetings, citing downward revision of budget (specifically
lack of stabilization in Premium Audio), timeline / planning
concerns, additional required post-close discovery work and
elevated stock price
• Final bids received from 2 parties on 11/14/24, both parties later
submitted revised offers
‒ Piano ($7.20 per share)(b)
▪ Bid $7.16 per share on 9/26/24
▪ Bid $6.00 per share on 11/14/24
▪ Bid $7.20 per share on 11/19/2024(b)
‒ Guitar ($7.50 per share)
▪ Bid $5.50 per share on 5/31/24
▪ Bid $6.50 per share on 9/26/24
▪ Bid $7.00 per share on 11/14/24
▪ Bid $7.50 per share on 12/13/24
DETAILED PROCESS OVERVIEW
a) Solomon distributed further downward-revised 2025B financials from Management on 12/9/24 and discussed with buyers that Management no longer supports
achieving previously forecasted FY 2026P figures.
b)Revised offer represents a $7.20 per share acquisition of 100% of Violin. Offer is predicated on Violin selling its 50% stake in the ASA JV for a minimum value.
Outreach Summary
32
CIMs Sent
Parties Contacted
93
18
Data Room Access
Bids
5
IOIs Received
Final Bids
Received
2
CIM Data Room
Strategic 11 5
Sponsor 21 13
Total 32 18 |
| 66 Private and Confidential
SELECTED TRANSACTION TERMS
Note: Violin’s fiscal year ends on the last day of February.
a) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as provided
by the Company.
c) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
Acquiror Guitar
Acquiror Ownership 28.7% of common shares outstanding; 100% ownership of GalvanEyes, who owns a 50% stake of
BioCenturion JV
Structure Acquire 100% of the remaining Class A and Class B common stock of Violin not owned by Acquiror
(17.1 million shares)
Purchase Price Per Share $7.50 per outstanding share in cash
Offer Premium to
Unaffected Stock Price (a) 163.2%
Implied Equity Value (b) $176.6 million
Implied Enterprise Value (c) $196.4 million
Financing
• Cash on hand and cash available via existing revolving credit facility
• Agreed to acquire 17.1 million shares of Class A and Class B common stock for $128.1 million plus
the assumption of net debt of $19.8 million(c) and other contractual liabilities per merger
agreement
Conditions and Approvals Controlling shareholders will enter into voting and support agreements in favor of the potential
transaction
Go-Shop Period No go-shop period
Termination Fee $7.5mil (3.8% of Enterprise Value)
Termination Date 6 Months
Key Dates to Closing
• Sign: December 17
• HSR Filing Deadline: December 31
(10 business days after signing)
• File Preliminary Proxy Statement with SEC:
January 14
• HSR Waiting Period End: January 31
• Mail Proxy Statement: February 25 – March 4
• Shareholder Meeting: March 18 – 25
• Close: March 31 – April 4 |
| 77 Private and Confidential
TRANSACTION PRICE ANALYSIS
Source: Capital IQ and Management provided information as of December 16, 2024;
totals may not foot due to rounding.
Note: Violin’s fiscal year ends on the last day of February.
a) Unaffected stock price represents stock price on 8/26/2024, the day before 8/27/2024
public announcement of strategic alternatives process. All financials included in
enterprise value calculation represent financials as of May 31, 2024 as represented in
the FY Q1 2025 10-Q. Does not include negative non-controlling interest of ($39.4mil) as
of May 31, 2024.
b)Shares outstanding as of October 31, 2024. Class A shares are entitled to one vote per
share. Source: Company provided information.
c) Shares outstanding as of October 31, 2024. Class B shares are entitled to ten votes per
share. Class B shares are entirely owned by Violin’s founder, John Shalam, and his
family. Source: Company provided information.
d)As of October 31, 2024. Source: Company provided information.
e) Does not include negative non-controlling interest of ($40.6mil) as of August 31, 2024.
Comprises ($4.0mil) of redeemable non-controlling interest related to Onkyo
acquisition and ($36.6mil) of non-controlling interest related to EyeLock.
f) Represents payments due upon a change-in-control. Source: Company provided
information.
g)Source: Capital IQ as of December 16, 2024. Volume-weighted average closing price for
the 90 most recent trading days from August 9, 2024 to December 16, 2024.
h)Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory,
EyeLock and BioCenturion)(Updated FY25_12.09.24) as provided to Solomon Partners
on December 9, 2024, and approved for its use by the Committee. Financials include
actual figures through October 31, 2024 and actual sales for November 2024.
i) Note: Excludes ~($0.4mil) of negative equity income in BioCenturion JV in FY 2025B.
BioCenturion JV is a 50/50 partnership between EyeLock, a majority-owned subsidiary
of Violin, and GalvanEyes.
(Amounts in Millions USD, Except Per Share Data) Unaffected Proposed
Stock Price (a) Offer Price
Stock Price $2.85 $7.50
Class A Shares Outstanding 20.2 20.3 (b)
Class B Shares Outstanding 2.3 2.3 (c)
Restricted Stock Units -- 1.0 (d)
Diluted Shares Outstanding 22.5 23.5
Total Equity Value $64.1 $176.6
Plus: Debt $67.8 $20.1 (d)
Less: Cash (4.2) (3.1) (d)
Plus: Non-controlling Interest -- -- (e)
Plus: Change-in-Control Payments -- 2.8 (f)
Total Enterprise Value $127.7 $196.4
Premium / (Discount) to:
Close On 12/16/2024 $8.00 (64.4) % (6.3) %
Unaffected Stock Price (a) 2.85 -- 163.2
Guitar Original Offer On 5/31/2024 5.50 (48.2) 36.4
90 Trading Day VWAP (g) 4.95 (42.5) 51.4
1-Year Median 6.92 (58.8) 8.4
1-Year High 11.45 (75.1) (34.5)
1-Year Low 2.32 22.8 223.3
Enterprise Value as a Multiple of:
Adjusted EBITDA - Management (h)(i) FY 2025B $1.3 156.6 x |
| 88 Private and Confidential
$17.1
$12.1
$1.3
08-15-24 Forecast (a) 10-04-24 Forecast (b) 12-09-24 Forecast (c)
$408.9 $405.1 $375.9
08-15-24 Forecast (a) 10-04-24 Forecast (b) 12-09-24 Forecast (c)
CHANGES TO MANAGEMENT FY 2025 BUDGET OVER TIME
Note: Violin’s fiscal year ends on the last day of February.
a) Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)", as provided to Solomon Partners on August 15,
2024, and approved for its use by the Committee. Financials include actual
figures through June 30, 2024 and actual sales figures for July 2024.
b)Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)(as of 8.31.24)", as provided to Solomon Partners on
October 4, 2024, and approved for its use by the Committee. Financials include
actual figures through August 31, 2024.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic
Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)”, as provided to
Solomon Partners on December 9, 2024, and approved for its use by the
Committee. Financials include actual figures through October 31, 2024 and
actual sales figures for November 2024.
NET SALES
ADJUSTED EBITDA
($33.0) (8.1%)
($15.8) (92.7%)
(Amounts in Millions USD) |
| 99 Private and Confidential
Premium / (Discount) to EV / FY 2025B Adjusted EBITDA EV / Adjusted EBITDA
Unaffected Current 1-Year 1-Year 1-Year FY 2025B FY 2025B FY 2025B
Stock Stock Price Stock Price Average High Low Equity Enterprise 8/15/2024 10/4/2024 12/9/2024
Price $2.85 $8.00 $6.38 $11.45 $2.32 Value Value $17.1 $12.1 $1.3
$2.85 -- (64%) (55%) (75%) 23% $67 $87 5.1 x 7.2 x 69.3 x
$5.50 93% (31%) (14%) (52%) 137% $130 $149 8.7 x 12.3 x 119.0 x
$6.00 111% (25%) (6%) (48%) 159% $141 $161 9.4 x 13.3 x 128.4 x
$6.50 128% (19%) 2 % (43%) 180% $153 $173 10.1 x 14.3 x 137.8 x
$7.00 146% (13%) 10% (39%) 202% $165 $185 10.8 x 15.2 x 147.2 x
$7.25 154% (9%) 14% (37%) 213% $171 $190 11.1 x 15.7 x 151.9 x
$7.50 163% (6%) 18% (34%) 223% $177 $196 11.5 x 16.2 x 156.6 x
$7.75 172% (3%) 21% (32%) 234% $182 $202 11.8 x 16.7 x 161.3 x
$8.00 181% -- 25% (30%) 245% $188 $208 12.2 x 17.2 x 166.0 x
$8.25 189% 3% 29% (28%) 256% $194 $214 12.5 x 17.7 x 170.6 x
$8.50 198% 6% 33% (26%) 266% $200 $220 12.9 x 18.1 x 175.3 x
$8.75 207% 9% 37% (24%) 277% $206 $226 13.2 x 18.6 x 180.0 x
$9.00 216% 13% 41% (21%) 288% $212 $232 13.6 x 19.1 x 184.7 x
$10.00 251% 25% 57% (13%) 331% $235 $255 14.9 x 21.1 x 203.5 x
Note: Violin’s fiscal year ends on the last day of February.
a) Current stock price, 1-year average, high and low as of December 16, 2024.
b)Represents EBITDA adjusted for non-recurring items.
c) Unaffected stock price of $2.85 represents close as of August 26, 2024 (prior to
August 27 public announcement of strategic alternatives process).
d)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of
October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
e) Enterprise value calculated as equity value plus net debt of $19.8mil as of October
31, 2024 (total debt of $20.1mil plus $2.8mil of change-in-control payments less
$3.1mil of cash). Enterprise value does not include negative non-controlling interest
of ($40.6mil) as of August 31, 2024.
f) Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)", as provided to Solomon Partners on August 15, 2024,
and approved for its use by the Committee. Financials include actual figures
through June 30, 2024 and actual sales figures for July 2024.
g)Source: "FY 2021-2026 Historical and Projected P&L (Excl. Domestic Accessory,
EyeLock and BioCenturion)(as of 8.31.24)", as provided to Solomon Partners on
October 4, 2024, and approved for its use by the Committee. Financials include
actual figures through August 31, 2024.
h)Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic
Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to
Solomon Partners on December 9, 2024, and approved for its use by the
Committee. Financials include actual figures through October 31, 2024 and actual
sales for November 2024.
ILLUSTRATIVE ANALYSIS AT VARIOUS PRICES
(Amounts in Millions USD, except per share data)
EXCLUDES DOMESTIC ACCESSORY AND EYELOCK / BIOCENTURION FINANCIALS
Guitar
Offer
(d)
(c)
(e)
(a) (b)
(f) (g) (h) |
| SECTION II – VIOLIN MARKET DATA |
| 1111 Private and Confidential
--
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24
--
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24
5/14/24: Violin
reported declining
YoY full-year
financial results
Affected
Stock
Price(b)
Affected Stock Price(b)
YEAR-TO-DATE
LAST 5 YEARS
VIOLIN STOCK PRICE PERFORMANCE
Source: Capital IQ as of December 16, 2024.
Note: Stock price Highs, Medians, and Lows calculated using daily close prices.
a) Stock price on 8/26/2024, the day before 8/27/2024 public announcement of strategic alternatives.
b)Represents trading after Violin’s announcement of strategic alternatives on 8/27/24.
c) Represents inflated trading range from March 2020 to July 2021 due to improved financial performance driven by COVID-related macroeconomic tailwinds.
5-Yr Median: $9.07
3-Yr Median: $8.78
1-Yr Median: $6.92
YTD Median: $6.72
Unaffected: $2.85(a)
8/27/24: Violin announced
evaluation of strategic
alternatives
Offer: $7.50
5/31/24: Guitar confidentially
submitted offer to the Board of $5.50
per share to acquire 100% of Violin
Price Date
High $10.85 1/9/2024
Low $2.32 8/5/2024
6-Mo Median: $5.98
Offer: $7.50
Price Date
High $27.18 2/17/2021
Low $1.83 3/20/2020
Unaffected: $2.85(a)
5/14/24: Violin reported
declining YoY full-year
financial results
COVID–Affected Trading(c)
1/9/24: Violin reported declining
YoY Q3 financial results and
settlement of Seaguard
arbitration for $42mil |
| 1212 Private and Confidential
VIOLIN BENEFICIAL OWNERSHIP BY CATEGORY
Source: Capital IQ and public filings as of December 16, 2024.
Note: Does not include 1.0mil of Restricted Stock Units as of October 31, 2024.
Class A Class B Total Percent Percent
Ownership Ownership Ownership Ownership Vote
Guitar 6.5 -- 6.5 28.7% 15.1%
Shalam Family 1.9 2.3 4.2 18.6% 57.2%
Other Insiders 0.8 -- 0.8 3.5% 1.8%
Top 10 Institutions 4.5 -- 4.5 20.0% 10.5%
Public and Other 6.6 -- 6.6 29.2% 15.3%
Total 20.3 2.3 22.5 100.0% 100.0%
(Amounts in Millions) |
| SECTION III – VIOLIN FINANCIAL OVERVIEW |
| 1414 Private and Confidential
(Amounts in Millions USD, Except Per Share Data)
Historical Projected
Fiscal Year Ending February 28, LTM Fiscal Year
Income Statement Data (a) 2021A 2022A 2023A 2024A Nov-24 2025B
Net Sales $497.6 $578.6 $482.8 $423.3 $368.8 $375.9
Gross Profit 143.4 157.4 125.1 104.0 92.5 103.7
Adjusted EBITDA 45.3 39.7 9.8 (2.4) (8.2) 1.3
Adjusted EBIT 34.9 28.1 (2.2) (14.0) (19.0) (9.5)
Margins
Gross Margin 28.8% 27.2% 25.9% 24.6% 25.1% 27.6%
Adjusted EBITDA 9.1 6.9 2.0 N M N M 0.3
Adjusted EBIT 7.0 4.9 N M N M N M N M
Growth Rates
Net Sales 16.3% (16.6%) (12.3%) (17.5%) (11.2%)
Gross Profit 9.8 (20.5) (16.9) (20.7) (0.3)
Adjusted EBITDA (12.3) (75.3) N M N M N M
Adjusted EBIT (19.3) N M N M N M N M
Balance Sheet and Cash Flow Data
Cash & Cash Equivalents $59.4 $27.5 $5.7 $10.7 $3.1
Total Debt (6.5) (12.2) (38.0) (72.4) (20.1)
Depreciation and Amortization 10.4 11.6 12.0 11.6 10.9 $10.7
Capital Expenditures 2.9 3.8 3.5 2.6 6.6
CONSOLIDATED HISTORICAL AND PROJECTED FINANCIALS
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” and “FY 2021-2025 Quarterly
Balance Sheets (Excl. Domestic Accessory, EyeLock and BioCenturion)(as of 8.31.24)”, as provided to Solomon Partners on December 9, 2024 and October 29, 2024,
respectively, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales figures for November 2024.
Note: Violin’s fiscal year ends on the last day of February. Financials exclude Domestic Accessory, EyeLock and BioCenturion. Excludes ~($0.4mil) of negative equity income
in BioCenturion JV in FY 2025B.
a) Adjusted to exclude certain non-recurring and extraordinary items.
b)Represents figures as of October 31, 2024. Source: Company provided information. Does not include $2.8mil of change-in-control payments as of October 31, 2024.
(b)
(b) |
| 1515 Private and Confidential
HISTORICAL AND PROJECTED FINANCIALS BY SEGMENT
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales figures for
November 2024.
Note: Violin’s fiscal year ends on the last day of February. Financials exclude Domestic Accessory, EyeLock and BioCenturion. Excludes ~($0.4mil) of negative equity income
in BioCenturion JV in FY 2025B.
a) Adjusted to exclude certain non-recurring and extraordinary items.
(a)
(Amounts in Millions USD) Historical Budget CAGR
FY 2021A FY 2022A FY 2023A FY 2024A FY 2025B FY '21-FY '25
Premium Audio $299.9 $344.0 $274.5 $237.9 $221.1 (5.9%)
Automotive Aftermarket 117.7 135.6 101.8 84.1 74.8 (8.7%)
Automotive OEM 46.2 65.0 73.0 58.3 46.1 (0.0%)
European Accessory 33.1 33.5 33.1 43.6 33.7 0.4%
Corporate 0.7 0.5 0.4 (0.6) 0.3
Total Revenue $497.6 $578.6 $482.8 $423.3 $375.9 (5.5%)
Growth 16.3% (16.6%) (12.3%) (11.2%)
Premium Audio $92.2 $98.0 $72.0 $60.4 $62.7 (7.4%)
Automotive Aftermarket 33.5 43.7 36.6 31.0 27.0 (4.2%)
Automotive OEM 5.8 3.6 5.8 (1.0) 3.6 (9.2%)
European Accessory 10.9 11.3 10.0 12.9 10.0 (1.8%)
Corporate 0.9 0.8 0.6 0.7 0.4
Total Gross Profit $143.4 $157.4 $125.1 $104.0 $103.7 (6.3%)
Margin 28.8% 27.2% 25.9% 24.6% 27.6%
Premium Audio $49.1 $42.2 $12.9 $8.9 $16.6 (19.5%)
Automotive Aftermarket 12.4 16.4 12.1 8.2 5.0 (16.5%)
Automotive OEM (5.6) (11.2) (7.5) (13.0) (7.8) NM
European Accessory 2.0 1.9 1.5 3.5 0.9 (14.6%)
Corporate (12.6) (9.6) (9.2) (9.9) (13.5)
Total Adjusted EBITDA $45.3 $39.7 $9.8 ($2.4) $1.3 (51.2%)
Growth (12.3%) (75.3%) NM NM
Margin 9.1% 6.9% 2.0% NM 0.3% |
| SECTION IV – VALUATION |
| 1717 Private and Confidential
$3
$7
$121
$74
$6
$15
$212
$289
$0 $50 $100 $150 $200 $250 $300
Selected Public Companies
(EV / FY 2025B Adj. EBITDA) (c)
Selected Precedent Transactions
(EV / FY 2025B Adj. EBITDA) (d)
Sum-of-the-Parts
Break-Up Sale Analysis (e)
52-Week Trading Range
SUMMARY VALUATION OVERVIEW
Source: Company provided information.
Note: “NM” (Not Meaningful) data points reflect negative implied equity values per share.
a) Unaffected stock price represents close as of August 26, 2024 (prior to August 27 public announcement of strategic alternatives process).
b)Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
c) Violin FY 2025B Adj. EBITDA used to represent CY 2024E EBITDA, as Violin’s fiscal year ends on the last day of February. Assumes FY 2025B Adj. EBITDA multiple of 2.6x –
5.0x. Implied equity value per share is NM due to net debt of $19.8mil exceeding implied enterprise value. Using now-superseded 10-04-24 Forecast set forth on pg. 8
(which was subsequently lowered by Management on 12-09-24), implied equity value per share range would have been $0.52 to $1.74.
d)Violin FY 2025B Adj. EBITDA used to represent LTM EBITDA, as Violin’s LTM EBITDA is negative. Assumes FY 2025B Adj. EBITDA multiple of 5.5x – 11.8x. Implied equity value
per share is NM due to net debt of $19.8mil exceeding implied enterprise value. Using now-superseded 10-04-24 Forecast set forth on pg. 8 (which was subsequently
lowered by Management on 12-09-24), implied equity value per share range would have been $1.99 to $5.26.
e) See pg. 22 for further detail; reflects fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock
Units as of October 31, 2024, as provided by the Company.
f) Represents trading range between Violin’s release of declining FY 2024 financial results on May 14, 2024 and Violin’s public announcement of the strategic alternatives
process on August 27, 2024.
Offer Price
$7.50
Unaffected Stock Price(a)
$2.85
(Amounts in Millions USD, Except Per Share Data) Implied Enterprise Value
Implied Equity Value Per Share
Legend
Implied Equity Value Per Share: $0.00 $1.28 $3.41 $5.53 $7.65 $9.78 $11.90
Implied Enterprise Value: $19.8
$4.29 $8.18
$2.32 $11.45
NM NM
NM NM
Net
Debt(b)
$4.53
$126
Trading Range
(5/15/24-8/26/24)(f) |
| 1818 Private and Confidential
5.0 x
4.5 x
2.6 x
--
2.0x
4.0x
6.0x
8.0x
Visteon B&O Tokai Rika
$2,360 $148 $885
12% 9% 8%
9% 41% (19%)
EV / EBITDA
SELECTED PUBLIC COMPANIES
Source of company historical financials: Company public filings and Capital IQ as of December 16, 2024.
Source of company projected financials: Median Wall Street analyst estimates per Capital IQ as of December 16, 2024, calendarized where applicable to conform to a December fiscal year end.
a) Figures converted to USD using 0.14 DKK/USD exchange rate as of December 16, 2024. EBITDA adjusted for IFRS leases to be on a more comparable basis with U.S. GAAP.
b)Figures converted to USD using 0.01 JPY/USD exchange rate as of December 16, 2024.
CY 2024E Median: 4.5x
Enterprise Value ($M):
CY 2024 EBITDA Margin:
(a)
EV / CY 2024E EBITDA
CY 2024 EBITDA Growth:
(b) |
| 1919 Private and Confidential
SUMMARY VALUATION BASED ON SELECTED PUBLIC COMPANIES
Note: Violin’s fiscal year ends on the last day of February.
a) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales for November
2024.
d)Violin FY 2025B figures represent CY 2024E figures, as Violin’s fiscal year ends on the last day of February. Multiples are on a calendar-year basis.
(Amounts in Millions USD, Except Per Share Data) Valuation Implied Less: Implied Implied Per
Multiples Enterprise Value Net Debt (a) Equity Value Share Value (b)
FY 2025B Adj. EBITDA (c) (d) $1.3 2.6 x - 5.0 x $3.3 - $6.3 ($19.8) NM NM NM NM |
| 2020 Private and Confidential
Source: SEC filings, public documents and news articles.
a) Converted to USD using 1.13 EUR/USD exchange rate at time of transaction announcement.
SELECTED PRECEDENT TRANSACTIONS
(a)
(Amounts in Millions USD)
Date
Announced Acquiror Target
Enterprise
Value
LTM EBITDA
Multiple
Dec-21 CCL Industries McGavigan Holdings $106 7.2 x
Feb-20 VOXX International Vehicle Safety Holding Corp. $17 5.5 x
Jul-19 Focusrite Pro Audio (ADAM Audio) $20 10.6 x
Nov-16 Samsung Electronics Harman International Industries $8,341 10.2 x
Aug-16 Mill Road Capital Skullcandy $155 11.8 x |
| 2121 Private and Confidential
SUMMARY
VALUATION BASED ON SELECTED PRECEDENT TRANSACTIONS
Note: Violin’s fiscal year ends on the last day of February.
a) Net debt calculated as $20.1mil of debt plus $2.8mil of change-in-control payments less $3.1mil of cash as of October 31, 2024. Source: Company provided information.
b)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31, 2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as
provided by the Company.
c) Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock and BioCenturion)(Updated FY25_12.09.24)” as provided to Solomon
Partners on December 9, 2024, and approved for its use by the Committee. Financials include actual figures through October 31, 2024 and actual sales for November
2024.
d)Violin FY 2025B Adj. EBITDA is used due to EBITDA being negative on an LTM basis.
(Amounts in Millions USD, Except Per Share Data) Valuation Implied Less: Implied Implied Per
Multiples Enterprise Value Net Debt (a) Equity Value Share Value (b)
FY 2025B Adj. EBITDA (c) (d) $1.3 5.5 x - 11.8 x $6.9 - $14.8 ($19.8) NM NM NM NM |
| 2222 Private and Confidential
Source: “FY 2021-2025 Historical and Projected Quarterly PL (Excl. Domestic Accessory, EyeLock
and BioCenturion)(Updated FY25_12.09.24)”, as provided to Solomon Partners on December 9,
2024, and approved for its use by the Committee, and other Company provided information.
a) Low-end of valuation multiples based on EV / CY2024E EBITDA multiple of comparable
company, Bang and Olufsen (as detailed on pg. 18). Mid- to high-end of valuation multiples
based on market tests and discussions with Management and reflects the judgement and
experience of Solomon Partners.
b)Comprises Automotive OEM, Automotive Aftermarket and German Accessories segments.
Valuation range based on market tests and discussions with Management and reflects the
judgement and experience of Solomon Partners.
c) Represents Corporate EBITDA burden excluding the $3.5mil of equity income received from
ASA JV. Multiple of 2.0x is a proxy for illustrative severance and transition / wind down costs.
Assumes NY Headquarters would be sold with the elimination of Corporate / Shared Services
and net proceeds would reduce illustrative severance and transition / wind down costs. NY
Headquarters valuation range of $8mil to $12mil based on JLL appraisal values.
d)Represents sale of 50% equity interest in ASA Electronics joint venture. EBITDA represents
$3.5mil of equity income received from ASA JV, which is included within the Corporate EBITDA
burden on a consolidated basis. Valuation multiples based on offers, market tests and
discussions with Management and reflects the judgement and experience of Solomon Partners.
Valuation range calculated as equity income multiplied by EV / EBITDA multiples plus 50% of
the $20mil in excess cash on ASA’s balance sheet.
e) Excludes ~($0.4mil) of negative equity income in BioCenturion JV in FY 2025B. BioCenturion JV
is a 50/50 partnership between EyeLock, a majority-owned subsidiary of Violin, and GalvanEyes.
Guitar purchased 100% of GalvanEyes equity in BioCenturion on 8/27/2024 in the form of a 10-
year earnout with a maximum total payment of $8mil. There is an additional potential total
earnout of $7mil in the 5 years proceeding the 10-year period, if the $8mil earnout is achieved
within the 10-year period. Valuation range based on 50% of the maximum total earnout of $8mil
in the 10-year period and reflects the judgement and experience of Solomon Partners.
f) Net debt assumes $20.1mil of debt, $3.1mil of cash and $2.8mil of change-in-control payments
as of October 31, 2024. Source: Company provided information.
g)Does not include negative non-controlling interest of ($40.6mil) as of August 31, 2024.
Comprises ($4.0mil) of redeemable non-controlling interest related to Onkyo acquisition and
($36.6mil) of non-controlling interest related to EyeLock.
h)Fully diluted shares outstanding of 23.5mil; includes 22.5mil shares outstanding as of October 31,
2024, and 1.0mil Restricted Stock Units as of October 31, 2024, as provided by the Company.
SUM-OF-THE-PARTS BREAK-UP SALE ANALYSIS
Execution, timing, stranded costs, financial performance, buyer landscape, market sentiment, public disclosure, tax leakage
Potential Risks
Does not reflect any analysis
of potential tax impacts
(Amounts in Millions USD, except per share data) Sum-of-the-Parts Break-Up Sale Analysis (EV / FY 2025B Adjusted EBITDA)
FY 2025B
Multiple
(TEV / Adj. EBITDA) Valuation
Segment Adj. EBITDA Low - Mid - High Low - Mid - High
Premium Audio (a) $16.6 5.0 x - 6.5 x - 8.0 x $82.8 - $107.7 - $132.5
Automotive OEM / Aftermarket and German Accessories (b) (1.8) N M N M N M 40.0 - 50.0 - 60.0
Total Segment-Level $14.7 8.3 x - 10.7 x - 13.1 x $122.8 - $157.7 - $192.5
Less: Corporate Expenses
(incl. Net Proceeds from Sale of NY Headquarters) (c)
($16.9) 2.0 x 2.0 x 2.0 x ($25.9) - ($23.9) - ($21.9)
Total Whole Co. ($2.2) N M N M N M $97.0 - $133.8 - $170.7
Equity in ASA Electronics Joint Venture (d) $3.5 4.0 x - 6.0 x - 8.0 x $23.8 - $30.7 - $37.6
Equity in BioCenturion Joint Venture (e) N M N M N M N M -- - 2.0 - 4.0
Total Whole Co. (incl. ASA and BioCenturion) $1.3 96.3 x - 132.8 x - 169.3 x $120.8 - 166.6 - $212.3
Less: Debt (f) ($20.1) ($20.1) ($20.1)
Plus: Cash (f) 3.1 3.1 3.1
Less: Change-in-Control Payments (f) (2.8) (2.8) (2.8)
Plus: Non-Controlling Interest (g) -- -- --
Equity Value $101.0 - $146.8 - $192.5
Fully Diluted Shares Outstanding (h) 23.5 23.5 23.5
Implied Share Price $4.29 - $6.23 - $8.18
Offer Price $7.50 $7.50 $7.50
% Premium / (Discount) of Offer Price to Implied Share Price 74.8% - 20.3% - (8.3%) |
Exhibit 107
Calculation of Filing Fee Tables
Schedule 13E-3
(Form Type)
VOXX International Corporation
(Exact Name of Registrant and Name of Person Filing
Statement)
Table 1: Transaction Valuation
| |
|
Transaction
valuation |
|
|
Fee Rate |
|
|
Amount of Filing
Fee |
|
| Fees to be Paid |
|
$ |
177,075,202.50 |
|
|
|
0.00015310 |
|
|
$ |
27,110.21 |
|
| Fees Previously Paid |
|
$ |
0 |
|
|
|
|
|
|
$ |
0 |
|
| Total Transaction Valuation |
|
$ |
177,075,202.50 |
|
|
|
|
|
|
|
|
|
| Total Fees Due for Filing |
|
|
|
|
|
|
|
|
|
$ |
27,110.21 |
|
| Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| Total Fee Offsets |
|
|
|
|
|
|
|
|
|
$ |
27,110.21 |
|
| Net Fee Due |
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| (1) | Aggregate number of securities to which transaction applies: As of January 13, 2025, the maximum number of shares of VOXX International
Corporation’s common stock to which this transaction applies is estimated to be 23,610,027 which consists of (a) 20,266,915 outstanding
shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”) entitled to receive the per share merger
consideration of $7.50, (b) 2,260,954 outstanding shares of Class B common stock, par value $0.01 per share (“Class B Common Stock”)
entitled to receive the per share merger consideration of $7.50, (c) 1,032,158 shares of Class A Common Stock underlying outstanding restricted
stock units, which may be entitled to receive the per share merger consideration of $7.50, and (d) the estimated maximum of 50,000 shares
of Class A Common Stock in respect of restricted stock units that may be granted prior to the merger and may be entitled to receive the
per share merger consideration of $7.50. |
| (2) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): Estimated solely for the purposes of calculating the filing fee, the underlying
value of the transaction was calculated based on the sum of (a) the product of 20,266,915 shares of Class A Common Stock and the per share
merger consideration of $7.50, (b) the product of 2,260,954 shares of Class B common stock and the per share merger consideration of $7.50,
(c) 1,032,158 shares of Class A Common Stock underlying restricted stock units and the per share merger consideration of $7.50, and (d)
the product of an estimated maximum of 50,000 shares of Class A Common Stock in respect of restricted stock units that may be granted
prior to the merger and the per share merger consideration of $7.50. In accordance with Section 14(g) of the Securities Exchange Act of
1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by 0.00015310. |
| (3) | VOXX International Corporation previously paid $27,110.21 upon the filing of its Preliminary Proxy Statement on Schedule 14A on January
27, 2025 in connection with the transaction reported hereby. |
Table 2: Fee Offset Claims and Sources
| |
|
Registrant or
Filer Name |
|
Form or
Filing
Type |
|
File
Number |
|
Initial Filing
Date |
|
Filing
Date |
|
Fee Offset
Claimed |
|
|
Fee Paid
with
Fee Offset
Source |
|
| Fee Offset Claims |
|
|
|
Schedule 14A |
|
001-09532 |
|
January 27, 2025 |
|
|
|
$ |
27,110.210 |
|
|
|
|
|
| Fee Offset Sources |
|
VOXX International Corporation |
|
Schedule 14A |
|
001-09532 |
|
|
|
January 27, 2025 |
|
|
|
|
|
$ |
27,110.21 |
|
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