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Denon Electronics Bought by Mitt Romney Corporation

by June 20, 2008
Mitt Romney Owns Denon

Mitt Romney Owns Denon

Missed it by that much. D&M Holdings Inc. (TSE 1:6735) and Bain Capital Partners LLC today announced that they have entered into an agreement, under which an acquisition corporation owned by investment funds advised by Bain Capital Partners LLC will launch a tender offer for all of the shares of D&M Holdings at a price of 510 yen per share of common stock.

To most people this will sound like "Denon Electronics purchased by blah blah blah blah blah..." but if you look into Bain Capital you will find that it has Mitt Romney as one of its principle founders back in 1984. We came this close to having a major electronics company at least partially owned by a Presidential Candidate. Oh well, those are the breaks... Bain Capital is also responsible for putting money behind Staples, Clear Channel Communications, Philips, Warner Music Group, Burger King, Home Depot, and Guitar Center (and a whole host of other high profile companies too lengthy to be listed here).

This price represents a premium of 37.1% over the average closing share price in the six months prior to June 19, 2008, and a premium of 68.9% over the unaffected closing share price on January 23, 2008, the day prior to the emergence of press speculation regarding a potential transaction involving the company. Following the completion of the tender offer process, the shares of D&M Holdings would be delisted from the Tokyo Stock Exchange.

If we read this correctly, Denon Electronics is now officially going to be an American company and go private.

“After an exhaustive review of strategic options, we have determined that this offer from Bain Capital represents the best overall value for our shareholders. The next few years should be an exciting time for D&M as we enter another phase in our development,” said Chairman and Chief Executive Officer Eric C. Evans. “If Bain Capital acquires D&M through the tender offer, we believe we will be better positioned as a privately held company to be more flexible in the fast-paced changing markets in which we compete. We will also have wider latitude to invest for medium- and long-term growth.”

Going forward, the Company intends to continue its active pursuit of acquisitions and growth in the consumer, commercial and automotive audio video businesses. D&M Holdings’ Board of Directors has agreed that the Bain Capital tender offer is in the best interests of the company. The Board of Directors will formally consider a resolution to recommend the tender offer to shareholders at the time the offer is launched.

The tender offer by Bain Capital is scheduled to be launched following the signing of the tender offer agreement. Bain Capital intends to purchase 100% of the shares of D&M Holdings. Any remaining outstanding shares would be obtained through subsequent the stages of the acquisition process. The entire process is subject to various legal conditions and clearances.

In addition, Bain Capital entered into an agreement today with RHJ International, S.A. (RHJI), D&M Holdings’ largest shareholder, under which RHJI has agreed to tender all its shares (45,323,160 shares or approximately 48.5% of fully diluted shares outstanding) of D&M Holdings to Bain Capital.

Morgan Stanley Japan Securities Co., Ltd. is acting as financial advisor to D&M Holdings in this transaction. Additional information regarding the tender offer will be released when the details have been determined.

Source: D&M Holdings, LLC

About D&M Holdings
D&M Holdings is a global operating company providing worldwide management and distribution platforms for premium consumer, automotive, commercial and professional audio and video businesses including Denon®, Marantz®, McIntosh® Laboratory, Boston Acoustics®, Snell Acoustics, Escientâ, Calrec Audio, Denon DJ, Allen & Heath, D&M Professional and D&M Premium Sound Solutions. Our technologies improve the quality of any audio and visual experience. All product and brand names with a trademark symbol are trademarks or registered trademarks of D&M Holdings or its subsidiaries. For more information visit www.dm-holdings.com.

About Bain Capital
Bain Capital is a global private investment firm that manages several pools of capital, including private equity, venture capital, and public equity and leveraged debt assets with more than $78 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in more than 300 companies in a variety of industries around the world, including Burger King, Dunkin’ Brands, AMC Theaters, MEI Conlux, NXP, Sun Telephone, Toys “R” Us, Warner Music Group, Sensata Technologies and FCI. The firm has a team of over 300 professionals dedicated to investing in and supporting its portfolio companies. Headquartered in Boston, Bain Capital has offices in Tokyo, Hong Kong, Shanghai, New York, London, and Munich.

About the author:
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Clint Deboer was terminated from Audioholics for misconduct on April 4th, 2014. He no longer represents Audioholics in any fashion.

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Recent Forum Posts:

gliz posts on June 24, 2008 15:59
gene, post: 425519
I wonder if Mitt is an audioholic?

not sure but he is a bass player!!
Clint DeBoer posts on June 23, 2008 07:10
As far as I'm concerned, including one of the more famous founders in the headline made for a much more catchy title…
fmw posts on June 22, 2008 07:06
gus6464, post: 425543
All those other companies that Bain has poured money into are pretty huge. Of course some are evil (Clear Channel), but some like Guitar Center are awesome. Hell Guitar Center has the same prices in their store as the online only stores like Musician's Friend.

Musician's Friend is a division of Guitar Center.
MapleSyrup posts on June 22, 2008 01:40
MicMacPaddyWhac, post: 425670
Sorry to pee on the premise of Clint's story, but Mitt Romney hasn't had anything to do with Bain Capital since 1998, when he left to head up the Salt Lake City Winter Olympics. You may or may not be horrified to hear that the firm's current leadership group are mostly Democrats.

As far as changes to D&M's business model go, they're likely to be evolutionary. For one thing, they were already owned by another investment group, who managed to put them on a growth trajectory attractive enough for Bain to pay a high multiple. For another, Bain is known for focusing on portfolio management – running the companies that they own well – rather than on pure financial engineering to generate returns.

I was wondering that myself. I thought I heard of Romney's leaving Bain a while ago. I just took for granted that he was still there.

Great summary too of what Bain does.
Seth=L posts on June 21, 2008 23:46
MicMacPaddyWhac, post: 425670
Sorry to pee on the premise of Clint's story, but Mitt Romney hasn't had anything to do with Bain Capital since 1998, when he left to head up the Salt Lake City Winter Olympics. You may or may not be horrified to hear that the firm's current leadership group are mostly Democrats.

As far as changes to D&M's business model go, they're likely to be evolutionary. For one thing, they were already owned by another investment group, who managed to put them on a growth trajectory attractive enough for Bain to pay a high multiple. For another, Bain is known for focusing on portfolio management – running the companies that they own well – rather than on pure financial engineering to generate returns.
ITT: industry insiders
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