In a move that has some of Strata-gee’s sources perplexed and scratching their heads, high-end commercial and pro video projector and display manufacturer Barco (Euronext: BAR) announced this week that it has reached an agreement in principle to acquire VerVent Audio Holding (“VerVent” and “Vervent”). VerVent itself was created by the merger of French loudspeaker maker Focal and British high-performance audio electronics manufacturer NAIM some years ago.
See more on the merger of Barco and VerVent…
Based in Kortrijk, Belgium, Barco is a public company whose shares are traded on the Euronext exchange under the symbol BAR. The company manufactures high-performance projectors and displays primarily targeted for the healthcare, enterprise, and entertainment channels.
When you look at the breadth of the Barco video solutions line, it’s impressive. Its product line Pantheon includes everything from Healthcare, like radiology displays, surgery monitors, dentistry, and digital pathology…to Enterprise solutions, such as massive control room displays, meeting room displays with clever collaboration technology…to Entertainment solutions, such as commercial cinemas, live events visuals, museums, themed events, and residential home theaters.
Barco: A Major Euro Player Looks to Get Bigger…Is Vervent the Way?
Barco is a fairly large company with 3,000 employees globally and Fiscal 2025 revenues of €964 million (about US$1.1 billion).
Vervent has been owned by the European private equity company, Alpha Private Equity, who acquired it in 2019. Headquartered in Saint-Étienne, France, Vervent is a premium audio group manufacturing and distributing high-end, high-performance audio gear under the Focal and Naim brands. While the panorama of products from this audio supplier is not quite as broad as Barco’s, it is fairly extensive for an audio-only supplier.
Vervent audio solutions include premium loudspeakers, immersive and active audio solutions, headphones, studio monitors, and automotive OEM audio systems. The formal announcement also says Vervent’s current assortment is “complemented by a growing custom installation and home theater offering.”
A €110 Million Euro Premium Audio Player Joins a €964 Million Global Video Company
Vervent is said to have a strong global distribution with an extensive retailer and distributor platform. This platform is said to include “80 premium boutiques and thousands of points of sale.”
Total annual revenues at Vervent are “around €110 million” (about US$127 million). The announcement did not say how many employees the company has. However, I discovered a copy of the announcement when Alpha Private Equity acquired Vervent from Naxicap Partners back in 2019. At that time, total employment was 430 people.
Does This Deal Make Sense? Strata-gee Sources are Skeptical
So why were certain Strata-gee sources perplexed by this news? In part, it would seem that Vervent brands Focal and Naim have not had significant market share in the U.S. in a long time…if ever. As the company went through its various owners, there were often reapproaches to dealers in an effort to rebuild its U.S. market. But as far as I can discover, these efforts have failed to make any appreciable gains for these brands here in the U.S.
If you are a Focal of Naim dealer and have a perspective on this deal, feel free to comment in the “Leave a Reply” comment box below. I’d like to hear what you think. But for most of the sources I spoke with, they failed to understand the overly laudatory comments Barco was making about the acquisition of Vervent.
Barco Stock Drops After Deal Announced
After the close of markets on Friday, March 9, Barco released its announcement. Over the following two days, the value of Barco shares declined by nearly 2.3%, from 10.50 per share to 10.26. However, with global inflation, tariff program disruptions, and a war raging in the Middle East, it is hard to draw any conclusions as to whether this drop in value is in any way associated with Barco’s acquisition of Vervent.
The value of the deal is €135 million or a little more than one x revenues. This is not a particularly generous multiple, and perhaps is a result of a recognition by Barco that further investment will be needed to get Vervent on track. Barco says the acquisition will be financed with its own funds.
The company plans to merge Vervent into its Entertainment division.
Barco CEO: ‘An Important Step’
Today marks an important step in Barco’s ambition to shape the future of immersive audiovisual experiences. By welcoming VerVent and its iconic Focal and Naim brands into the Barco family, we accelerate our strategy to deliver fully integrated solutions where image and sound reinforce each other seamlessly. Building on our leadership in visualization, we go all-in on Entertainment. The addition of high‑fidelity audio strengthens the overall experience of our offering across high‑end residential and broader consumer/home entertainment environments, as well as in professional markets. This combination expands our reach, deepens our technology capabilities, and positions us to capture new opportunities across the audiovisual value chain. We are excited to embark on this next chapter together. [Emphasis in original]
An Steegen, Barco CEO
As you can see from CEO Steegen’s statement above, this move is a strategic acquisition for Barco, which is looking to expand into audio in order to be able to offer complete, integrated audio/video solutions. As they’ve never been in audio, adding Vervent represents incremental revenue for the company.
However, entering a new category is not as easy as it looks from the outside. I suspect Barco will find it difficult to achieve success with this acquisition. Here are factors they may want to consider…
Entering a New Category is Not As Easy As It Looks From the Outside; Alpha’s Efforts
To What End? – In a separate announcement of this transaction put out by Alpha Private Equity that was not widely distributed, it took pains to delineate the many steps it took to improve Vervent’s performance after it purchased the company in 2019. For example, Alpha says they: 1) Supported Vervent’s “transformation” into a global audio platform; 2) Accelerate[d] its international development; 3) Worked closely with management to “strengthen the company’s strategic positioning,” expand its global presence, and enhance its operational capabilities; 4) Implemented a “global retail strategy aimed at increasing brand awareness among luxury and lifestyle customers.”
Also, Alpha PE says – It “supported a strong pipeline of new product launches, enabling the company to expand its portfolio across high-end home audio systems, headphones, custom installation solutions and automotive OEM audio technologies.” These moves “further reinforced the global position of the Focal and Naim brands as reference names in premium audio performance and design.”
What Was the End Result?
But Wait, Alpha Says It Did Even More – Alpha says in addition to all of the above, it furthermore 1) “worked alongside the company to strengthen the management team, bringing additional international expertise and strategic leadership to support Vervent’s continued growth and global expansion;” 2) “Together with management, Alpha implemented initiatives aimed at enhancing manufacturing efficiency, improving supply chain capabilities and scaling global distribution, providing Vervent with a robust operational platform to support its next phase of growth.”
Wow…that’s a lot of energy, effort, management & cash resources expended beyond the purchase price over the last few years. So…what was the end result of all of this effort? When Alpha purchased Vervent from Naxicap Partners back in 2019, the release announcing that transaction noted Vervent had annual revenues of €110 million. And now, nearly seven years later, in this new announcement of the sale of the company to Barco, what were the current revenues of Vervent said to be?
€110 million…
I’d say Barco has their work cut out for them…
To learn more about Barco, visit www.barco.com.
See more on Vervent at vervent-audio-group.com.
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