All,
I think I have found a US company for Deswell to buy. Carver Corp, (CAVR) <http://www.carver.com/>, the high-end US audio equipment manufacturer that has fallen on hard times. Market cap of CAVR is currently only $1 million (yes, that's not a typo). CAVR is about to be delisted from NASDAQ and may file for bankruptcy soon. I say Deswell and Behringer should set up a joint venture and each buy half. Deswell currently manufactures audio equipment for Behringer <http://www.behringer.de/>, though I believe it is more professional studio equipment rather then high-end home equipment. Still, the Behringer/Deswell combo should have the audio and manufacturing expertise to turn Carver around. Also, the owner of Behringer personally bought about 10% of Deswell stock from the Deswell managers, so they obviously can work closely together.
Carver has a great brand name, known for quality products. Sales are declining, but seem to be around $10 million/year currently. CAVR apparently manufactures 50% of their products in the US, and is having trouble being supplied by outside suppliers. Deswell/Behringer could buy them, shut down US manufacturing, keep a small sales and and research/design staff here, move all their factory equipment to China (like HIHOF/Kienzle), and resume manufacturing in China, thereby boosting margins substantially.
Or maybe Behringer alone should buy CAVR, and use DSWLF for manufacturing. Then DSWLF remains in the OEM business only.
Note: I am not at all recommending purchase of CAVR stock at this time. In my above scenario, I would hope CAVR would actually file for bankruptcy, their common stock gets wiped out, and therefore Deswell/Behringer can pick up the assets cheaper out of bankruptcy court.
Dennis |
