Mid-February 2008

Audio Research Buyout And Other Mergers
Article By Steven R. Rochlin
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  The buzz online was strong recently, as reported within the Industry News, that longstanding American high-end audio manufacturer Audio Research Corporation (ARC) was acquired by Italy's Quadrivio SGR. As Quadrivio SRG is a an investment management company formed in 2000, it should come as no surprise that only a handful of months earlier they also purchased Sonus Faber, widely considered one of Italy's popular high-end audio loudspeaker manufacturers. Now they have focused on American amplification manufacturer ARC, with over 38 years of experience, now Quadrivio SGR has a way to mate their loudspeakers with appropriate amplification.

Audiophiles know that Harmon International, a deep pocket company with over 50 years of experience, has purchased many high-end brands including JBL, Infinity, Mark Levinson, Crown, Lexicon, Revel and has a majority stake in AKG over the years. As my previous two editorials (seen here and here) covered the economy, it should come as no surprise that many American companies may now be ripe for the picking due to the low value of the United States dollar.

Audio Research is a highly respected company due to being one of the oldest continually operating manufacturers in American that manufacturers high quality products. Founded in 1970, they have continually provided excellent customer service while producing products that evolved in reliability, features and performance. In the 'old days' of high-end audio, there were very few companies and Audio Research was one of the main players.

Today we are seeing the move to various mergers and acquisitions. International Audio Holding B.V. has recently announced they now own both Crystal Cable and Siltech. While i could continue this line of naming names, the point being that high-end audio companies are valuable and being purchased by companies looking to further enhance the sales of high-end audio. Other benefits are that research and development can be combined to allow production of products that provide increased features and performance.

As an example, the Mark Levinson brand name is now long removed from the man of the same name; we see that the company now greatly flourishing under the control of Harmon International. The Mark Levinson brand originally built its reputation from the genius of John Curl, a now legendary audio designer who helped to produce the Mark Levinson JC-1 preamplifier. This acquisition by Harmon International happened at a great time as, according to he company's website, "By the mid ‘80s, despite innovations such as a fully modular preamplifier and extraordinary open-reel tape decks suitable for demanding studio recording sessions, Mark Levinson Audio Systems found itself in difficult financial straits. However, the Mark Levinson tradition of hand-crafted excellence was rescued by Madrigal Audio Laboratories, Mark Levinson’s "sister company" distributor. Key personnel regrouped to continue design and production. The reorganization brought needed fiscal discipline and an expanded engineering staff."

Audiophiles remember the dazzling array of innovations by the now Harmon International owned Mark Levinson brand as the then newly developed No. 30 reference processor earned top marks. It was followed by the No. 31 reference CD transport, a unit equally impressive with design innovations not seen before within the high-end audio industry. As these incredible new products evolved, we saw edge-of-the-art technology continue to enter high-end audio due to the availably of finances plus the deep technical resourced afforded by owners Harmon International. Today we find Harmon International bringing high-end sound to mobile audio as Lexus offers their Mark Levinson braded car audio system. If it were not for Harmon International's acquisition, the Mark Levinson brand name may have died due to alleged mismanagement and never seeing the light of day in today's marketplace. Instead, today we have the company producing innovative products for the home and marketing to consumers the benefits of high-end music reproduction within their automobile.

As as side note, while i realize that car audio is not highly looked upon by home audio audiophiles, simply getting the Mark Levinson brand name out there may pay dividends to wealthy individuals who may also seek out Mark Levinson home audio products. That is a very good thing!

While many of us may look back at the budding days of high-end audio with rose-color glasses, we also know that the original owners Saul Marantz, Paul W. Klipsch, Avery Fischer and other legendary names have long since gone. Large companies now control these interests for better or worse. Some companies have gone on to produce products so impressive that the original owners could only dream of! Other times the name is simply used for marketing purposes of lower-end units. Let us all hope that when high-end companies are purchased by large conglomerates that they understand the value of continual research and development it takes to achieve ever-higher levels of music reproduction. i also hope they are able to leverage their wealth to market the benefits of high-end audio to a larger audience. For this will allow greater music reproduction abilities and further increases the exposure to our industry to a wider audience. As always, in the end what really matters is that you...

Enjoy the Music,

Steven R. Rochlin