Charlesbank Increases Purchase Price for DEI Holdings

VISTA, Calif., June 19, 2011 /PRNewswire/ -- DEI Holdings, Inc. (Pink Sheets: DEIX) today announced that funds affiliated with Charlesbank Capital Partners have agreed to acquire all of the outstanding common shares of DEI Holdings at an increased price that is expected to result in a per share consideration of approximately $4.45 - $4.47 in cash, subject to certain terms and conditions.

As previously announced, DEI Holdings entered into a definitive merger agreement on May 12, 2011 to be acquired by Charlesbank in an all-cash transaction.  Under the original terms of the merger agreement, DEI Holdings shareholders would have received approximately $3.79 - $3.80 per share in cash.  DEI Holdings subsequently received a non-binding written proposal from Gibson Guitar Corp. to be acquired for approximately $4.47 per share in cash, subject to certain terms and conditions.  The Gibson proposal indicated that it intended to finance the entire purchase price with debt financing.  After learning of the Gibson proposal, Charlesbank offered to match the Gibson proposal, subject to the transaction being approved by DEI Holdings' shareholders by 5:00 p.m., Eastern time, on June 20, 2011.

Consistent with its fiduciary duties, the DEI Holdings Board of Directors carefully reviewed the Gibson offer and discussed the merits and risks associated with completing such a transaction.  Among other factors, the Board of Directors considered Gibson's need to conduct additional due diligence, the fact that Gibson's proposed debt financing was subject to numerous conditions outside the control of DEI Holdings, and the expected delay in closing on Gibson's offer.  Based on its review, the Board of Directors determined that the Gibson proposal presented a high degree of uncertainty and execution risk when compared to the likelihood of completing a transaction with Charlesbank on an expedited basis.

The DEI Holdings Board of Directors, after consultation with its independent financial advisor and outside legal counsel, determined that acceptance of Charlesbank's increased price is advisable and in the best interests of the company's shareholders.  As a result, DEI Holdings entered into an amendment to the merger agreement with Charlesbank on June 19, 2011, a copy of which is available at www.deiholdings.com.  The Board of Directors recommends that shareholders vote for the adoption of the merger agreement, as amended, and approval of the merger at the special meeting of shareholders scheduled for Monday, June 20 at 10:00 a.m. Pacific time.

About DEI Holdings, Inc.

Headquartered in Southern California, DEI Holdings, Inc. is the parent company of some of the most respected brands in the consumer electronics industry.  DEI Holdings is the largest designer and marketer in North America of premium home theater loudspeakers (sold under the Polk Audio® and Definitive Technology® brand names), and consumer-branded vehicle security and remote start systems (sold under Viper®, Clifford®, Python®, Autostart® and other brand names).  DEI Holdings is also a supplier of mobile audio sold principally under the Polk Audio® and Orion® brand names.  DEI Holdings markets its broad portfolio of products through many channels including leading national retailers and specialty chains throughout North America and around the world.  Founded in 1982, the company has operations in California, Maryland, Canada, Europe and Asia.  For more information on the company, visit www.deiholdings.com.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed acquisition of DEI Holdings, Inc. by Charlesbank Capital Partners.  In connection with the proposed transaction with Charlesbank Capital Partners, DEI Holdings, Inc. mailed a proxy statement to its shareholders.  SHAREHOLDERS OF DEI HOLDINGS, INC. ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY ALL RELEVANT MATERIALS THAT HAVE BEEN SENT TO THEM, INCLUDING THE PROXY STATEMENT, AND THE AMENDMENT TO THE MERGER AGREEMENT BECAUSE THESE MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION WITH CHARLESBANK CAPITAL PARTNERS.  The proxy statement and other relevant materials, including the amendment to the merger agreement discussed above, are posted on the company's website at www.deiholdings.com.  The proxy statement and other relevant materials may also be obtained for free from DEI Holdings, Inc. by directing such request to DEI Holdings, Inc., One Viper Way, Vista, CA 92081; or calling (800) 876-0800.  The contents of the website referenced above are not deemed to be incorporated by reference into the proxy statement.

Participants in Solicitation

DEI Holdings, Inc. and its directors, executive officers, and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with the proposed transaction with Charlesbank Capital Partners.

Forward-Looking Statements

Certain statements herein are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements reflect the company's current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations.  Any such forward-looking statements are subject to various risks and uncertainties, including DEI Holdings Inc.'s and Charlesbank's ability to consummate the proposed transaction between the parties on the contemplated timeline, the effect of the acquisition proposal received from Gibson Guitar, and other factors.  The company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise.

SOURCE DEI Holdings, Inc.