Masimo announced that it has entered into a definitive agreement to sell its Sound United consumer audio business to Harman International, the company that is also a wholly-owned subsidiary of Samsung Electronics, for an aggregate purchase price of $350 million in cash, subject to certain adjustments. The transaction is expected to close by the end of 2025, subject to receiving necessary regulatory approvals.
The decision to sell the consumer business to Harman follows the previously announced review of Masimo’s consumer audio business by the company’s board following the ousting of disgraced CEO Joe Kiani. The company’s new CEO, Katie Szyman, and the Board of Directors seem to be determined to refocus on professional healthcare and do anything to regain the severe losses originated by the company’s failed attempt to enter the consumer space with a copy of Apple’s Watch focused on health biometrics.
Katie Szyman explains: “Since I took over as CEO, a key objective has been refocusing our business to ensure we are allocating time and resources to areas of unmet clinical need and driving growth and operational efficiencies. This transaction aligns with these objectives. Our consumer audio business and its talented team will be well positioned for growth and success under Harman’s leadership.”
For Harman, the business that was formerly aggregated under the structure of Sound United represents a hybrid combination of great brands and profitable opportunities— particularly in the automotive audio segment— together with strong challenges. Bowers & Wilkins and Denon are among two of the strongest motivations for the acquisition, representing great product portfolios and long-term brand value. Denon and Marantz are two strong brands that Harman will be able to leverage in its portfolio. Less clear is what to do with the remaining names of Polk Audio, Definitive Technology, Classé, and Boston Acoustics, which in fact, conflict with Harman’s business with JBL, Harman Kardon, Mark Levinson, Arcam, Revel, and several other brands.
“Finding the right home for this business has been a stated priority of the new Board from day one, and this transaction represents an important milestone as we continue to position the Company to achieve our goals of accelerating revenue growth while delivering disciplined margins. Masimo has tremendous opportunities ahead, and we are confident we have the right healthcare-focused strategy, experienced leadership team, and culture of innovation in place to build on our significant positive momentum,” says Quentin Koffey, Vice Chairman of Masimo’s Board of Directors, about the divestiture.
Dave Rogers, President of Harman’s Lifestyle division, adds: “This acquisition represents a strategic step forward in the expansion of Harman’s core audio business and footprint across key product categories such as Home Audio, Headphones, Hi-fi components, and Car Audio. It complements our existing strengths and opens new avenues for growth. Sound United’s portfolio of world-class audio brands including Bowers & Wilkins, Denon, and Marantz, will join Harman’s iconic family of brands, including JBL, Harman Kardon, AKG, Mark Levinson, Arcam, and Revel. Built on a shared legacy of innovation and excellence in audio technology, this combined family of brands, together with the talented employees of both companies, will deliver complementary audio products, strengthen our value proposition, and offer more choices to consumers.”
The transaction is still subject to the satisfaction or waiver of certain closing conditions, including the receipt of any required regulatory approvals. Centerview Partners LLC and Morgan Stanley & Co. LLC served as financial advisors to Masimo, and Sullivan & Cromwell LLP served as legal advisors to Masimo in connection with the transaction.
www.harman.com
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