AV Blockbuster: AVI-SPL and Whitlock Merge to Form $1.3 Billion Behemoth
Marlin Equity Partners will own majority stake of new AVI-SPL, with H.I.G. Capital the minority stakeholder in the AV industry’s largest worldwide entity.Leave a Comment
There have been plenty of blockbuster mergers and acquisitions in the AV integration world in the last few years, but none have come close to sending the shockwaves through the industry that the pairing of AVI-SPL and Whitlock did when news first trickled out about it today.
The newly merged company, which will retain the AVI-SPL name, will have Marlin Equity as a majority investor and H.I.G Capital holding a minority stake.
“This is an incredibly exciting new chapter for our company, our employees, and our customers,” said AVI-SPL CEO John Zettel, in the combined announcement.
“AVI-SPL and Whitlock have always shared a mutual admiration and respect for one another due to our similar passion for innovation and commitment to providing world-class customer experiences.
“Combining these strengths along with our talented employees, strong global partnerships, and worldwide resources will ensure we continue to deliver the very best experience for our local and global customers undergoing digital transformations,” he said.
Marlin Equity Partners became majority owners of Whitlock in October 2019, while H.I.G. Capital acquired AVI-SPL in April 2016.
The transaction is subject to closing conditions and is expected to be finalized in the first quarter of this year.
“The unification of our talented, passionate teams, as well as our local and global resources, will drive significant value to our customers and employees,” said Whitlock CEO Doug Hall, in the joint announcement.
“Together we are delivering exactly what our customers have been seeking – comprehensive technology management and sustainable support solutions that enhance the end-user experience, increase technology adoption and usage, and improve business outcomes. This is an exciting time for our employees, our partners, and our customers,” he said.
AV Industry Reacts to the Deal
The deal to bring together two of the industry giants has generated a lot of buzz in the industry already.
“I’m incredibly excited by this news,” AVIXA CEO David Labuskes told CI. “I think that both AVI-SPL and Whitlock are amazing companies led by two extraordinary business leaders. While initially surprising, I think when you reflect on this from the outside, it isn’t hard to understand.”
Labuskes pointed to three factors behind the AVI-SPL and Whitlock merger:
- AV is growing. Our industry continues to grow at an extraordinary rate.
- AV is a critical business asset. The services and solutions we provide our customers are becoming more and more strategic and competitive necessities rather than luxuries.
- Big AV is still new. This means there are efficiencies yet to be achieved in business and delivery models currently in place.
“I don’t have any expertise to comment directly on this specific merger from a business perspective, but I can tell you that the conditions described above will attract smart money every time, every day,” says Labuskes. “The great news for AVIXA’s members…is that we’re already in that business.
“Who they are competing with and their strengths or challenges against those competitors will always change – to some companies’ advantage and others detriment. But, when the market is growing, the product is growing in importance and the business is getting more efficient, you have all the ingredients for a long future of growth and profitability,” he says.
“We are in a great industry and marketplace that continues to advance,” says Labuskes.
PSNI Global Alliance executive director Chris Miller echoes Labuskes’ sentiments in many ways.
“Personally, I think this type of activity just further demonstrates the overall financial health and awareness of our industry as a lucrative investment strategy for private equity firms,” he says. “It has not always been the case to attract funding and investors.
“There are balancing factors that come in to play with consolidations that in the long run tend to make these activities win-win for the industry, even though smaller firms don’t always believe it in the short term,” says Miller.
Ari Fuchs, managing director and chief quality officer at The DAK Group, Ltd., wasn’t involved with the AVI-SPL/Whitlock deal but he certainly has some opinions about it.
“I think the AVI-SPL/Whitlock deal supports the ongoing thesis that consolidation is and will continue to be a major trend in the industry,” he says. “It further confirms private equity’s continued appetite for the sector.
“I also see opportunity for smaller, mid-market integrators to take advantage of the trends to build and grow their business through mergers, acquisitions and strategic hires. The ecosystem needs smaller, more nimble integrators to complement the large players in the market,” says Fuchs.
I think AVI-SPL and Whitlock are two large, well-run organizations, each with unique attributes,” he says. “Combined, I expect them to do great things together and perhaps set the standard in the industry.”
USAV Group VP Chris Salazar-Mangrum is excited about what the deal means for the AV industry as a whole.
“From an industry perspective, this news is big for the AV integrator market,” he says. “We have seen these types of large transactions with manufacturers and distributors and now AVI-SPL joins a tier for a single integrator in the billion-dollar club. The USAV and PSA network of technology integrators exceeds $6 billion across AV, security and IT industries and we understand the work ahead of AVI-SPL as they transition.”