Noise Cancellation Technologies Inc. said yesterday that it had agreed to purchase almost all of the assets of an automotive audio components supplier in a deal that could be worth as much as $16 million.
Top Source Automotive, a subsidiary of Top Source Technologies Inc. in Palm Beach Gardens, Fla., is a leading supplier of automotive audio components to U.S. auto manufacturers. Its sale to Noise Cancellation is subject to stockholder approval, said David Natan, Top Source's vice president and chief financial officer.
Top Source would become part of NCT Audio Products, a Noise Cancellation subsidiary. Noise Cancellation, based in Stamford, Conn., has research and development facilities in Linthicum.
Under the terms of the agreement, Noise Cancellation is to pay $7.5 million in cash, a secured note of $2.5 million and as much as $6 million in cash or NCT Audio Products Inc. shares over two years if specified financial milestones are achieved.
"The acquisition of Top Source affords us an excellent line of audio products as well as inroads to automotive manufacturers for all of NCT's technologies," Noise Cancellation President and Chief Executive Officer Michael J. Parrella said in a statement.
Buying Top Source "makes a lot of sense for Noise Cancellation because automotive products will create a lot of synergy for them," Natan said.
Noise Cancellation has been pursuing a strategy of using its technical expertise in noise reduction, originally developed for industrial use, for consumer-oriented products such as phones and audio-equipment.
Last month the company announced that it would buy back up to 10 million shares of its common stock, which closed yesterday at 59.38 cents, up 3.13 cents.
Pub Date: 8/18/98