Mackie Designs Inc. and Eastern Acoustic
Works Inc. Sign Letter of Intent
February 11, 2000
Mackie Designs Inc. and Eastern Acoustic Works Inc.
(EAW) announced today that they have signed a non-binding letter of intent
by which Mackie will purchase all shares of EAW.
Based in Whitinsville, MA, EAW is recognized as the world's leading
high-end professional loudspeaker design and manufacturing firm. It holds
leadership positions in both fixed installation and concert touring markets.
The company's products are utilized in sound reinforcement systems at
major stadiums and arenas, performing arts centers, churches, clubs, and
more recently, in the custom residential market. In fiscal year 1999,
the company recorded sales in excess of $40 million.
The move unites two of the professional audio industry's most successful,
dynamic developers of technology. Both sides point out that the arrangement
will prove highly beneficial to each entity, while at the same time, both
companies will continue to focus their primary energies on their respective
core markets, products and customer bases.
"I can't stress enough that this move is a win-win for both sides.
There will be a cross-pollination of our best technologies, and at the
same time we both remain devoted to serving our primary markets,"
states EAW President Kenneth Berger. "EAW's market share continues
to grow. It simply comes down to an even greater future for the company,
an ideal opportunity to move forward and expand at an even greater pace.
"Both sides point out that the majority of each company's day-to-day
operations will remain separate, including product distribution channels.
EAW will remain based in Whitinsville, its current corporate headquarters
and manufacturing site. "Mackie is a tremendous marketer and leader
in the music retail marketplace, while EAW has established itself as the
worldwide leader in professional installation and concert touring,"
Berger adds. "Putting these resources together creates an entity
more powerful and effective than the sum of the individual companies."
"The synergy created by bringing our two companies together is
enormous," states Greg Mackie, Chairman of Mackie. "At present
Mackie and EAW do not have any products which compete. In fact, Mackie
and EAW specialize in completely different markets of the professional
audio world. We believe that together we can help each other grow in new
areas for both of our companies.
"He continues, "The EAW brand enjoys a reputation for being
the best in their markets, complementing Mackie's own reputation for quality
products."
"The most critical factor in this partnership is the people we
will have join the Mackie team," adds Jamie Engen, Mackie's Chief
Operating Officer. "We have tremendous respect for Ken Berger and
EAW management, all of whom have built an extraordinary business with
quality products. Ken and the management team have created a company that
fosters an entrepreneurial culture that will mesh well with our own.
"This release contains forward-looking statements within the meaning
of "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's current
expectations or beliefs and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those described
in the forward-looking statements. The forward-looking statements in this
release concern the following subjects: agreement by the parties as to
a final purchase and sale agreement; future financial and operating results;
approval of the transaction by regulators; and timing and benefits of
the transaction.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the
risk that a final purchase and sale agreement will not be completed; the
risk that Mackie's, RCF's and EAW's businesses will not be integrated
successfully; costs related to the transaction; inability to obtain, or
meet conditions imposed for governmental approvals for the transaction;
inability to further identify, develop and achieve commercial success
for new products, services and technologies; increased competition and
its effects on pricing, spending, third-party relationships, the customer
base and revenues; inability to establish and maintain relationships with
commerce, advertising, marketing, technology and content providers; risks
of new and changing regulation in the U.S. and international markets.
For a detailed discussion of these and other cautionary statements, please
refer to the Management's Discussion and Analysis section of Mackie's
Form 10-K for the fiscal year ended December 31, 1998 and the Risk Factors
section of Mackie's Form 10-Q for the quarter ended September 30, 1999
as filed with the Securities and Exchange Commission.
For more information, visit Mackie's web site at www.mackie.com. |
