BOSE presentation at Berkshire Hathaway's annual shareholders meeting in Omaha, Nebraska.
David A. Grosjean | CNBC
Bose Corp. will buy McIntosh Group, a deal that will give the Massachusetts-based company control of one of the most recognized names in high-end audio.
Bose CEO Leila Snyder said McIntosh will continue to manufacture the high-end audio equipment it is known for out of its New York headquarters. The deal also includes Sonus Faber, a company that handcrafts high-end speakers in Italy.
The purchase of the two audio workshops provides Bose with access to the luxury audio market, Snyder told CNBC in an interview.
“There is an opportunity for luxury, where the consumer is more discerning, and really cares about the heritage and the story, and that handcrafted nature,” she said.
Snyder, who took over as CEO of Bose in 2020, did not provide terms or price for the deal. McIntosh was previously owned by Highlander Partners, a Dallas-based private equity firm.
McIntosh has been making high-end speakers and other audio equipment since 1949, and the price of one of its devices can reach tens of thousands of dollars. Sonus Faber sells a pair of speakers for $140,000.
The purchase shows how Bose is navigating an environment where there is more competition in headphones and audio electronics than ever before. Bose is privately owned and does not share annual revenue, although it had sales of about $3 billion in 2023, according to Forbes. It has about 3,000 employees.
Bose is entering the luxury audio market
Premium audio products — defined as products that cost more than $5,000 — grew 12% in 2023 to about $2.8 billion in total sales, according to an estimate from Futuresource Consulting. The deal will allow Bose to test its products in a high-end market, which is already expensive — a pair of Bose headphones can easily cost $350.
“These are different customers that we are not currently reaching with our technology and products,” she said.
Snyder did not rule out the possibility of Bose producing McIntosh-branded headphones or other products.
“We think there's a real opportunity around wearables in the luxury and high-performance space as well, which is something we expect you'll see in the future,” Sender said.
Bose is known for its speakers and headphones, including the QuietComfort line of headphones, which was one of the first noise-canceling headphones to hit the market in 2000. It also sells speakers, wireless earbuds, amplifiers, and car audio equipment. It divested the group that built sound systems for auditoriums and other professional environments last year.
The audio market has grown since Bose was one of the few high-end brands.
Bose now competes against some of the world's largest companies, including… applewhich bought Beats Electronics for $3 billion in 2014 and released AirPods in 2016, targeting the premium headphones market.
There's also a new audio-focused competition for Bose.
Sonos, best known for its home speakers, introduced its first noise-canceling headphones earlier this year, though the company is struggling with an app redesign in May that was poorly received by users. Bose has also spent the last decade competing with smart speakers from the likes of Amazon and Google Which were often priced too low to stimulate adoption.
Buying the two luxury audio workshops could help Bose grow in the in-car stereo market, which Snyder said makes up about a third of the company's total business. Sonus Faber produces speakers for Lamborghinis, for example, and some Jeeps have a McIntosh-branded audio system. One possibility that excites Bose, she said, is that it could incorporate noise-cancelling technology into electric cars to make driving quieter.
“There are places today that maybe the Bose brand can't go,” Snyder said. “Lamborghini is a great example of that.” “You really want the best kind of cutting-edge technology to be in those luxury or highest-performance cars.”
Watch: Why the hearing aid industry is poised for growth