Big hi-fi news this morning as Naim Audio and Focal announce their merger (more in our story here).
The newly conjoined company has issued a Q&A covering a lot of the key issues involved in the deal - here are the highlights below.
We'll be adding more information and reaction as we receive it - in the meantime, add your feedback in the comments section below.
Why have the two companies merged?
Q:. What's the rationale for the deal?
A: It's a merger of European minds. We share a passion for audio and together we can move to the next level. We can achieve far more together than would have been possible alone, yet at the same time we are able to retain everything that is unique about Naim/Focal and everything that our customers love us for.
We have some incredible developments in the pipeline and this alliance will help us get those to market as quickly as possible.
Q: What are the operational and financial benefits of putting the two businesses together?
A: This is all about growth – not about finding financial synergies. The merger in fact means we are able to increase our investment in people and R&D to help us accelerate both brands.
Q. Was Naim in financial trouble? Is this a rescue?
A: Absolutely not. Naim has enjoyed successive years of strong growth and is a very successful company in its own right. It was very important to us that we find a strong performing partner to team up with.
Q: Do you have any experience of acquiring/integrating other businesses?
A: This is our first, but as the two brands will continue to be run independently by their respective management teams, not much will be changing.
Q: Is this about access to new geographic markets? Which markets are the two companies strong in at the moment?
A: Both brands have successful export strategies, across Europe, Asia and the USA. We will certainly be capitalising on any opportunity to introduce both brands to new markets.
Q What is the vision for where the combined company will be in five years?
A: We will be a European champion for our industry, producing amazing products within our individual brands.
Q: Are there plans for any other acquisitions?
A: We don’t have any active plans at the moment. Our focus is on Focal and Naim
Financials
Q. How much has Focal & Co paid for Naim?
A: Naim was owned by its management, who now have significant holdings in Focal & Co.
Q: What is the turnover/profits for each company?
A: Focal has a turnover of circa £31 million; Naim circa £18 million. Both are profitable businesses.
Q: What is the ownership breakdown?
A: Focal & Co is owned by Jacques Mahul (Founder and Chairman), CM-CIC (France's third largest bank; long-term shareholder in Focal) and the management teams of Focal and Naim.
Q: Where will the new company be based/incorporated?
A: Both brands will retain their existing facilities.
Q: Will there be job losses? – Where and how many?
A: Quite the opposite. This is all about growth and expanding our team. If you are a great audio engineer or designer, there will be no better place to be. Give us a call!
Q: Is Naim’s management team staying?
A: Yes. The two brands will continue to be managed as they are now.
Q: Are there cultural challenges to overcome?
A: Our two sites are separated by the Channel, but united by a passion for perfect sound. We have been pleasantly surprised by how well the two teams have come together.
Some incredible achievements have happened when the British and French have worked together – from Concorde to the Channel Tunnel.
Q: Will the two production sites be integrated over time?
A: No. We will keep both sites and develop them further. It is important for us to retain manufacturing facilities in the UK and France.
What about brand identity? Future developments?
Q: Will the brands remain separate?
A: Absolutely – retaining their unique philosophies and product ranges.
Q: Will the two R&D/design teams stay separate?
A: R&D is an area where we can pool our efforts to create something which is better than the sum of its parts. Both brands have outstanding R&D teams, which will continue to work as separate teams – with joint technology groups set up to look at big picture projects.
Q: Any concerns about diluting the quality of the Naim/Focal brand/losing customers?
A: No. We are committed to running the two brands independently, so there will be no change to the customer’s experience of either brand.
Q. What would you say to the loyalists of the brands who are concerned that their beloved brand will change?
A: I would assure them that we would do nothing to damage the unique qualities of either brand and we are committed to proving that to them over the coming months and years.
Q: Will the distributors/retailers be encouraged/forced to stock both brands?
A: No. Arrangements stay as they are now. But we would be happy to have the conversation if any distributor asked.
Global opportuntiies for the new company?
Q: What is the geographical split for Naim and Focal’s sales?
A: Focal – 70% export – Europe, Asia, North America
Naim – 60% export – Europe, Asia, America
Q: What are the priority markets?
A: The core European markets combined with the emerging markets of Asia.
Q: How many retail outlets does each have worldwide?
A: Naim has 650 Naim trained specialists internationally; Focal’s network represents more than1500 dedicated dealers worldwide
Bestsellers for both brands?
Q: What are each brand’s star products?
A: Focal Home: Utopia, Electra, Dome
Focal Car: K2 Power
Focal Pro: Solo6Be, Twin6Be
Naim: 500 Series CD555, Classic Series HDX, Uniti System
Q: What are your immediate plans for Focal and Naim? Are there any imminent product launches?
A: Naim will be launching two significant new products before Christmas.
Focal’s imminent launches are:
– Bird, a complete and autonomous system with wireless functionality, affordable, simple and stunning
– XS Book a 2.0 Multimedia reference system
– Spirit One the first step to Focal in the world of headphones
Q: What will happen to the Naim Label in future?
A: It’ll be business as usual for Naim Label. We are still passionate about music and we will continue to invest in the artists we love.
Q: Will the strategy of the Naim Label change?
A: Our ethos is still very much the same; to bring to market music of superb technical and creative quality, in a broad range of genres and to provide a platform for deserving talent. The way we do business and how we make decisions will not change.
And the Naim for Bentley car audio deal?
Q: Will this merger change anything in the arrangements between Bentley and Naim?
A: No.
Q: Will Naim and Focal launch a car system?
A: No, Naim has an exclusive contract with Bentley, we will not supply aftermarket or systems by Naim to any other automotive manufacturer.
Q. Will Naim branding appear on any Focal automotive components?
A: Absolutely not.