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David A. Grogan | David A. Grogan CNBC
Bose Corp. is acquiring McIntosh Group in a deal that will give the Massachusetts-based company control of one of the most prominent names in high-end audio.
Bose CEO Lila Snyder said McIntosh will continue to make the high-end audio equipment it is known for at its longtime headquarters in New York. The deal also includes Sonus Faber, a company that handcrafts high-end speakers in Italy.
In an interview with CNBC, Snyder said that acquiring these two audio factories allows Bose to enter the high-end luxury audio market.
“Luxury has this opportunity because consumers are more discerning and really interested in tradition and story and the essence of handcrafting,” she said.
Snyder, who took over as Bose CEO in 2020, did not provide terms or price for the deal. McIntosh was previously owned by Dallas-based private equity firm Highlander Partners.
McIntosh has been producing high-end amplifiers and other audio equipment since 1949, with a piece of equipment selling for tens of thousands of dollars. Sonus Faber sells a pair of speakers for $140,000.
The acquisition demonstrates how Bose is responding to an environment where competition for headphones and audio electronics is more intense than ever. Bose is a private company and does not share annual revenue, although sales will be approximately $3 billion in 2023. According to Forbes. It has approximately 3,000 employees.
Bose enters high-end luxury audio market
Futuresource Consulting estimates that total sales of luxury audio, defined as products costing more than $5,000, will grow 12% in 2023 to approximately $2.8 billion. The deal will allow Bose to test the high-end market for its products, which are already expensive — a pair of Bose headphones can easily cost $350.
“These are different customers that our technology and products haven’t really reached yet,” she said.
Snyder didn’t rule out the possibility of Bose making McIntosh-branded headphones or other products.
“We do think there’s a real opportunity for wearables in the luxury and performance space as well, and we hope you’ll see that from us in the future,” Synder said.
Bose is best known for its speakers and headphones, including its line of QuietComfort headphones, one of the first noise-canceling headphones to hit the market in 2000. It spins off a group that builds sound systems for auditoriums Other professional settings last year.
The audio market has been growing ever since Bose became one of the few high-end brands.
Bose now competes with some of the largest companies in the world, including appleIn 2014, it spent $3 billion to acquire Beats Electronics, and launched AirPods in 2016, targeting the high-end headphone market.
Bose also has new audio-focused competition.
Sonos, best known for its home speakers, launched its first noise-cancelling headphones earlier this year, although the company suffered from poor user response to its redesigned app in May. Over the past decade, Bose has also competed with smart speakers from: Amazon and Google To stimulate adoption, their prices are often low.
Acquiring the two luxury audio plants could help Bose grow in the car audio market, which Snyder said accounts for about a third of the company’s overall business. For example, Sonus Faber makes speakers for Lamborghini cars, and some Jeeps are equipped with McIntosh-branded sound systems. One possibility Bose is excited about, she said, is that it could integrate its noise-cancelling technology into electric vehicles to make them run quieter.
“Today, there are some places where the Bose brand might not be able to enter. Lamborghini is a good example of that,” Snyder said. “You really want those luxury or highest-performance vehicles to have the best cutting-edge technology.”
