By David Keene
On December 20, 2012Harman
executives were still in Denmark today, and so could not be reached for comment, but the announcement that HARMAN is acquiring entertainment lighting company Martin Professional
surprised this journalist. While Harman has done many acquisitions over the years, they’ve been, essentially, acquisitions of other audio manufacturers. This is a new ballgame.
We’ll be hearing about Harman’s logic and goals with this acquisition for months, and it’s not rocket science to understand Harman’s desire to leverage their huge market footprint and distribution network to offer some lighting products to their many church, school, staging, and other audio customers. It's important to note that Martin is really stronger in the "production" end of the lighting world– sophisticated automated luminaires for stage use on both the entertainment and corporate staging side. More the "high end" of the lighting market (excuse the choice of words) than the pedestrian world of par cans for high school and church auditoriums.
|Left to right: Christian Engsted (Martin), Blake Augsburger (HARMAN), and Jens Bjerg Sørensen (Schouw & Co.)|
In a press release from Harman, Blake Augsburger, executive vice president and president of the Harman Professional Division, said he is looking forward to welcoming Martin. “Martin product lines are an excellent complement to our professional audio business. After the transaction closes, we will be able to offer a full line-up of audio, lighting and video solutions for the live stage as well as permanent venues and installations.”
From Schouw’s perspective it’s not hard to figure out why they wanted to sell– they’re a VC company, not a strategic acquirer and market-groomer like Harman. Schouw and Co A/S (Schouw & Co) is a Denmark-based holding company with investments in various Danish industrial companies, aside from Martin: BioMar is a manufacturer of feed for the fish farming industry. Fibertex Personal Care is a manufacturer of nonwovens for the personal care industry. Fibertex Nonwovens is a manufacturer of nonwovens for industrial applications. Grene is primarily a trader of spare parts and accessories for agriculture. Hydra-Grene is a trading and engineering company with business in trading and manufacture of hydraulic component. Xergi is a supplier of turnkey biogas plants.
Martin should do well under Harman. Of course it’s not clear how the logistics/housekeeping will play out. Martin has a large sales force in the US (much larger than competitor High End Systems for example). Martin has about a twenty-year history of operating US distribution and sales out of Florida– will that continue as an independent office?
Martin’s new Viper is a great product. The Martin (www.martin.com) Viper profile fixture (the MAC2000 replacement) is, according to Robert Mokry of LightParts
, “getting a lot of attention and for good reason– it’s a nice light. The Viper offers 26,000 lumens of light output from a 1000W lamp in a compact package.”
It will be interesting to see how this marriage plays out. Both companies are public companies so it’s easier to gauge the success of the union. The market seems to like it. Martin’s stock:
Day's High (today): kr.143.00 (52-wk Low: kr.89.50)
Of course, the stock of the acquiring company doesn’t normally get a bump. HAR closed Wednesday's regular session at 43.52. The stock has been trading between $34.08 and $52.75 for the past 52 weeks.
The press release Wednesday from Harman:HARMAN Signs Agreement to Acquire Entertainment Lighting Company Martin Professional
December 19, 2012– STAMFORD, Conn.--(BUSINESS WIRE)--HARMAN, the global premium audio and infotainment group (NYSE:HAR), said today that it has reached an agreement to acquire Martin Professional A/S of Denmark, a world leading provider of lighting solutions for the entertainment, architectural, and commercial sectors, for EUR 110 million. The deal is subject to regulatory approvals and customary closing conditions, and is expected to close early in 2013.
“Our intelligent lighting solutions for touring, events, theatre and installations are a natural and perfect complement to Harman’s pro audio business. Our customers expect increasingly advanced and integrated solutions and HARMAN’s rich portfolio of technologies will enable us to drive new business opportunities.”
“We look forward to welcoming the talented employees and dynamic innovations of Martin Professional to the HARMAN organization,” said Dinesh C. Paliwal, Chairman, President and CEO. “This acquisition will be an excellent complement to our professional business serving all our global markets including the fast-growing BRIC nations. With the acquisition of Martin Professional, our strategy to provide system solutions to our customers will be further enhanced as we will be able to offer a full audio and lighting electronics solution for the live stage and events as well as permanent avenues and installations. We look forward to unlocking this new business potential.”
“We are excited at the prospect of a strong integrated solution incorporating Martin Professional’s products with HARMAN’s professional audio brands and technologies,” said Martin President Christian Engsted. “Our intelligent lighting solutions for touring, events, theatre and installations are a natural and perfect complement to Harman’s pro audio business. Our customers expect increasingly advanced and integrated solutions and HARMAN’s rich portfolio of technologies will enable us to drive new business opportunities.”
Founded in 1987 and headquartered in Aarhus, Denmark, Martin Professional is a world leader in the creation of dynamic lighting solutions for the entertainment, architectural, and commercial sectors. Martin lighting solutions are industry standard on top tours and events, grace prestigious theatres, energize nightclubs, and decorate major television studios around the globe. Recent Martin lighting installations include concerts by Lady Gaga, Lenny Kravitz, and Linkin Park; special events such as the Olympics and Commonwealth Games; venues such as Wembley Arena in London; television productions such as X Factor and the MTV Music Awards, as well as numerous cinema, retail and infrastructure facilities.About Martin
Martin Professional is a wholly owned subsidiary of Aktieselskabet Schouw & Co., a holding company traded on the Nasdaq Copenhagen Stock Exchange. Martin reported revenues of approximately US$150 million in fiscal 2011 and employs over 450 people across its operations, including state-of-the-art manufacturing facilities in Denmark and the United Kingdom. Martin operates the specialty lighting industry’s most complete and capable distributor network with local partners in nearly 100 countries.About HARMAN
) designs, manufactures and markets a wide range of audio and infotainment solutions for the automotive, consumer and professional markets — supported by 15 leading brands, including AKG, Harman Kardon, Infinity, JBL, Lexicon and Mark Levinson. The Company is admired by audiophiles across multiple generations and supports leading professional entertainers and the venues where they perform. More than 25 million automobiles on the road today are equipped with HARMAN audio and infotainment systems. HARMAN has a workforce of about 13,900 people across the Americas, Europe and Asia, and reported net sales of $4.4 billion for the year ended June 30, 2012. The Company's shares are traded on the New York Stock Exchange under the symbol NYSE:HAR.