Harman Agrees to $7.8 Billion Buyout

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Harman International Industries Inc. said it agreed to be acquired by Kohlberg Kravis Roberts and the private-equity arm of Goldman Sachs Group Inc. in a deal valued at roughly $7.8 billion. The Washington, D.C.-based Harmon is the parent company for the popular Harman Kardon, JBL and Infinity brands which extend into the automotive, pro audio, and home theater industries. Under the agreement, Harman shareholders can elect to exchange their shares for $120 a share in cash, or for shares of the new company. The bid can be calculated as being 17% over the current share price as of this week ($102.56 NYSE).The terms of the deal also permit the company to solicit other proposals over the next 50 days.


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Crown (pro-audio) and Revel (higher end speakers) are two more Harman companies.

I wonder how Harman et al will be changed by this? For various reasons, I have the opinion that Harman is a progressive name in the audio fields but that their brands are poorly marketed. For instance, the general perception of Harman Kardon's increasingly poor quality control, whether true or not, is ultimately a marketing problem. In the consumer realm, JBL and Infinity are continuously drifting toward making the same class of products and relatively few know about Revel, leaving a gap in the middle of their consumer product range. I also do not think JBL's pro-audio equipment effectively brings its high-end connotation down to their consumer lines. A lot of potential without a grand plan it may seem.

[j_garcia]

I'm curious to see how it pans out as well, and whether it will mean changes to any of their products. Also curious if it is similar to what Denon and Marantz did forming a holding company that owns all of the associated brands.