BINGHAMTON — On Oct. 8, 2012, Fine Sounds SpA of Milan, Italy bought 100 percent of the stock in McIntosh Laboratory, Inc., located at 2 Chambers St. in Binghamton. The seller was D+M Group, a company formed in 2002 and headquartered in Mahwah, New Jersey. McIntosh, a global leader in prestige home-entertainment and quality audio […]
BINGHAMTON — On Oct. 8, 2012, Fine Sounds SpA of Milan, Italy bought 100 percent of the stock in McIntosh Laboratory, Inc., located at 2 Chambers St. in Binghamton. The seller was D+M Group, a company formed in 2002 and headquartered in Mahwah, New Jersey.
McIntosh, a global leader in prestige home-entertainment and quality audio systems, conducts all of its research and development and manufacturing at the Binghamton site. An entry-level system starts at a few thousand dollars and reaches $800,000 for a high-end system.
Fine Sounds is a holding company that owns a stable of quality audio producers: Sonus Faber, an Italian company that builds loudspeakers; Audio Research Corp. in Minneapolis, which manufactures vacuum-tube and solid-state electronic audio components; Wadia Digital, also based in Minneapolis, dedicated to digital-audio reproduction; and Sumiko, a Berkeley, Calif.–based importer and distributor of quality audio components. Fine Sounds, in turn, is owned by Quadrivio SGR, an Italian private-equity firm managing a family of funds in excess of $300 million. The middle-market firm is authorized by the Bank of Italy and independently managed.
“The acquisition represents a strategic direction for our company to be a leader in the international, luxury-audio arena and to have products that are the best in the world in their category,” Mauro Grange, CEO of Fine Sounds Group, said in a news release. “With the distribution synergies we will have with our other outstanding brands, McIntosh will be positioned for substantially accelerated global growth … McIntosh will help strategically strengthen our brand portfolio, allowing us to have a broader product offering … [presenting] customers a complete solution,” Grange concludes.
The McIntosh Laboratory story
The company story begins with Frank H. McIntosh, who began his career with Bell Telephone Laboratories. During World War II, he was head of the radio and radar division of the War Productions Board, which led him into a post-war business requiring high-power, low-distortion audio amplifiers. Dissatisfied with what was then available, McIntosh launched his own company in 1949 in Silver Spring, Md. In 1951, the company relocated to Water Street in Binghamton and in 1956 moved to its present Chamber St. location. The McIntosh name gained international fame when its products were used at President Lyndon B. Johnson’s inauguration speech, the Woodstock Festival in 1969, and concerts by the Grateful Dead in 1974, where their amplifiers were called the “wall of sound.” Japanese audio-maker Clarion bought the firm in 1990 and sold it in 2003 to D+M.
Charles (Charlie) Randall, the current McIntosh president, says the company “… employs 140, of whom 132 are employed in Binghamton … Annual revenues total $40 million to $50 million, and exports represent 55 percent of the revenue … We use a distributor/dealer network to sell our products, of which 97 percent are bought by residential customers … [We] currently have 43 distributors representing McIntosh in 80 countries … The site has two buildings: the manufacturing facility which is 80,000 square feet and the research-and-development building which is another 10,000 … The company owns the real-estate.”
Randall says, “McIntosh holds 43 patents and 34 trademarks. Our R&D team includes 21 dedicated employees, including 11 engineers with specialties in electronics, acoustics, software, mechanics, production, and quality-assurance … One of the advantages our company has in attracting outstanding engineering talent is that we are small enough that our engineers are involved in the entire process from concept to [execution], unlike a large company where they may only work on a piece of the project.”
Randall himself is an electrical engineer who interned at McIntosh when he was 19. After graduating from the Rochester Institute of Technology, he joined the company full-time and was appointed CEO in 2001. He is celebrating both 28 years with McIntosh and his 50th birthday.
Randall has a clear demographic profile of his customers. “We target affluent people, those with expendable income … We’re marketing to architects, contractors, and those people who are building $5-million homes and buy yachts … That’s why we’re sponsoring a car auction at Amelia Island and events at Pebble Beach … You don’t have to spend $20,000 for a watch or more for one of our systems unless you are looking for the best … When you are 45-55 years old and the kids are out of the house or graduated from college, you think about buying something for yourself … When you were younger, you appreciated good music and now you appreciate quality,” says Randall.
Since the days of Frank McIntosh, who demanded perfection, the firm that bears his name is consumed with controlling its quality. That’s why Randall refuses to send any of his work overseas; he insists that everything be done at the Binghamton plant. The vision of perfection, of producing the best quality, begun 64 years ago is alive and well at McIntosh.
“The company is set to continue growing,” says Randall. “Our exports have climbed at least 10 to 12 percent each year, and now we’re positioned [with the new ownership] to leverage our marketing and distribution globally … Our future is bright.”
Contact Poltenson at npoltenson@tgbbj.com