Breaking News! Gibson Buys Stanton

We’re getting word that Gibson executives have just announced internally that they have purchased the Stanton group, which also includes KRK and Cerwin Vega!.
Gibson Buys Stanton
There’s been chatter for the last few months that several manufacturers were “circling the carcass” of the Stanton group, after we exclusively reported that the concern had put itself up on the auction block. Native Instruments, Numark, Behringer and others reportedly sniffed around or were in talks with Stanton, but nothing materialized.

Now Gibson, who has come out of left field according to insiders, has made the acquisition from ML Capital. It has been conveyed that Tim Dorwart, Stanton’s current CEO, will somehow still oversee the group for the near future. Others have commented that Gibson is only interested in KRK, the group’s cash cow, and will probably spin off Stanton’s DJ group when it can find a suitable buyer, if it hasn’t already located one. Although ML Capital didn’t outwardly say they would reject selling off each segment, it was obvious that they preferred to dispose of the poor investment in one deal. This may have been the reason that finding a suitable buyer turned off some of the interested parties attached to the deal originally, since they were only interested in one of the three segments.

What Gibson, who at one time owned Oberheim, ultimately decides to do with the Stanton DJ unit is anyone’s guess, but at least Henry Juszkiewicz can rest assured that the DJ unit’s offices won’t get raided for illegally obtained wood products.

Update: December 6, 2011
Gibson Officially announces acquisition:

As part of its continued expansion as a lifestyle brand, Gibson Guitar, the world’s premier musical instrument manufacturer, today announced the creation of its pro audio division through the acquisition of the platform assets of the Stanton Group. One of the oldest, most widely recognized and respected designers and marketers of audio products, Stanton Group is comprised of KRK Systems, Cerwin-Vega! and Stanton DJ and makes superior products for consumers and professionals. Together, the companies will form Gibson Pro Audio division, which will be headquartered in Nashville, Tennessee.

The closing of this acquisition marks Gibson’s further expansion into the pro audio market with loudspeaker, monitor and electronics technology. In addition, Stanton Group gives Gibson the ability to leverage its existing research and development base.

“Right now we have an extremely powerful brand that people recognize and value, but the musical instrument category is inherently limited because people who purchase instruments also need to know how to play them,” says Henry Juszkiewicz, Chairman and CEO of Gibson Guitar. “This new division is perfectly aligned with our core. It expands our reach to fellow music lovers and allows us access to 20 in 20 consumers instead of the one in 20 we currently hit.”

Juszkiewicz adds, “Stanton produces some of the best pro audio equipment in the world and we’re incredibly excited to be working with the very talented team at Stanton as we take Gibson into the future.”

“We are very excited to be joining the Gibson family,” says Timothy Dorwart, CEO of the Stanton Group. “This partnership will allow our brands and core management team to continue our growth and momentum in the marketplace within our shared channel while the association with the iconic Gibson brand gives us the opportunity to quickly expand our customer base. Moreover, we bring technical resources that will enhance the R&D capabilities of both companies.”

If you look at the wording of the press release, there are a few choice phrases that stand out. First off, labeling Gibson a “lifestyle brand” — instead of a music instrument manufacturer or some derivative — is an intriguing election. Could Gibson be thinking of retaining Stanton and attempt to turn it into more of a music gadget / electronics marque? Does Stanton have enough brand currency to actually pull this off? Or will they end up starving to death like Opcode?

The “Gibson Pro Audio division…will be headquartered in Nashville, Tennessee,” which unfortunately translates into current Stanton employees losing their jobs. A harsh turn of events, especially in this economy.

Stanton’s beset CEO, Dorwart, commented “moreover, we bring technical resources that will enhance the R&D capabilities of both companies.” You can certainly see some overlap with Cerwin-Vega! — in fact, Dorwart has repeatedly attempted to position the speaker concern in the DJ realm, but never gained the traction they wanted with increased competition from companies with better technology. Where else can they share technology? Gibson branded amps? Maybe. Stanton’s da router communication protocols? Not likely.

Juszkiewicz commented: “This new division is perfectly aligned with our core. It expands our reach to fellow music lovers and allows us access to 20 in 20 consumers instead of the one in 20 we currently hit.” What’s Henry speaking to here? KRK is the only brand with serious market penetration. We don’t see how this acquisition fills in the 19 spaces that Gibson is missing from their winner-take-all “poker hand.”

This will certainly be interesting to watch.

Gibson