Harman International acquires Sound United from Masimo Consumer for USD 350 million cash

The spin-off supports Masimo’s focus on its core business in the field of professional healthcare and the provision of market-leading innovations, is how Masimo Corporation explains the now announced sale of the entire consumer audio division Masimo Consumer Audio. In other words, the subsidiary that was established not so long ago when Sound United was acquired, much to the surprise of the entire industry. Everything that Sound United once was now goes directly to Harman International, making it a wholly owned subsidiary of Samsung Electronics Co. Ltd.

Renowned brands such as Denon, Marantz, Bowers & Wilkins, but also Polk Audio, for example, are now part of the Harman International portfolio, which in turn boasts very impressive names such as JBL, Harman Kardon, Mark Levinson, AKG, Arcam and Revel. And let’s not forget that the software company Roon Labs LLC. is already part of Harman International…

Not just a handful of dollars – 350 million in cash

What’s particularly remarkable about this sale is that Masimo Corporation doesn’t seem to want to spend too much time on it. The motto is clear: everything must go.

The official press release from Harman International states quite matter-of-factly that the sale follows the previously announced review of Masimo’s consumer audio business and will support the company’s strategic focus on promoting innovation in its core business area, professional healthcare. And that the transaction is expected to be completed by the end of 2025, subject to the necessary regulatory approvals.

Significantly, however, a total purchase price of USD 350 million was agreed, which will be paid in cash.

Hardly any options on the market

It is also clear that Masimo Corporation had few alternatives, as it wanted to withdraw from the consumer electronics segment, into which it had more or less stumbled blindly, as quickly as possible. The current situation on the market, however, hardly offered much interest in a complete group, despite renowned brands. Officially, however, it sounds a little different…

“Finding the right buyer for this business has been a stated priority of the new Board of Directors from the outset, and this transaction is an important milestone in our journey to position the company to achieve our goals of accelerating sales growth while maintaining disciplined margins. Masimo has tremendous opportunities ahead and we are confident that we have the right healthcare-focused strategy, experienced leadership team and culture of innovation to build on our significant positive momentum.”

Quentin Koffey, Vice Chairman of the Board of Directors of Masimo Corporation

Harman International – The new industry leader

For Harman International Industries, the acquisition of the entire Masimo Consumer division, or everything that used to be Sound United, is probably just another step towards being able to position itself even more broadly as the industry leader in the audio, TV and, above all, automotive sectors. Above all, it is the automotive sector that promises good business and in which the right name, i.e. the image of a brand, can be decisive.

“This acquisition is a strategic step to expand Harman’s core audio business and strengthen our presence in key product categories such as home audio, headphones, HiFi components and car audio. It complements our existing strengths and opens up new growth opportunities. Sound United’s portfolio of world-class audio brands such as Bowers & Wilkins, Denon and Marantz will become part of HARMAN’s legendary family of brands, which includes JBL, Harman Kardon, AKG, Mark Levinson, Arcam and Revel. Building on a shared heritage of innovation and excellence in audio technology, this unified family of brands, together with the talented people of both companies, will deliver complementary audio products, strengthen our value proposition and offer consumers more choice.”

Dave Rogers, President of Harman International’s Lifestyle Division

Getting to the point

The fact that Masimo Corporation stumbled into the consumer electronics business completely unprepared when it took over Sound United more or less out of the blue was probably clear to every expert in the industry from the very beginning. The company, which specialised solely in medical technology, could only fail in the end with the newly formed Masimo Consumer Division, especially as radical cuts were made in the absence of any strategy and the associated bleak prospects. What is left of the Consumer Division is now apparently to be disposed of as quickly as possible, and a buyer has been found in Harman International. It is hardly surprising that it is Harman International of all companies, as there were probably not too many alternatives and ultimately the global corporation Samsung Electronics Co. Ltd. is behind it, which is probably actually paying the purchase price of US$ 350.000.000,- from its postage account. Harman International is thus once again able to expand its portfolio of renowned brands, and was already a partner of Denon, Marantz and Bowers & Wilkins – for example JBL, Harman Kardon, Mark Levinson, AKG, Arcam, Revel and Roon Labs LLC.

How the merger of such established brands will ultimately be realised in practice is, of course, completely open.

At an international level, it is probably a question of finding the courage and determination to actually continue the numerous brands as independent solutions. Nothing would be more fatal than giving up the individual character of each brand, which would ultimately be the end of even the most renowned name.

But new concepts are also clearly needed for successful business activities in the local markets, as it is hardly possible to continue as before. It is therefore particularly exciting to see how business activities in the local markets will actually be handled at the end of the day, and by whom. Frankly speaking, especially for the DACH region, it has to be said that, from a sober point of view, two companies are coming together that have already made radical savings and reduced their workforce to the absolute minimum. Without a new vision for a common path for the brands, without a solid strategy, it will probably not work, you have to be honest. Also, or perhaps precisely because the overriding wish is that all the brands and their diverse products remain with us as an industry.