WASHINGTON, DC-The pro audio industry took on the airs of Wall Street late last month when it was announced that Harman International Industries will be acquired by a coalition of equity investors: Kohlberg Kravis Roberts (KKR) and Goldman-Sachs Capital Partners (GSCP). Harman International Industries will continue to operate under its current name and structure.
The proposed transaction is valued at approximately $8 billion, and is expected to be completed in the third quarter of 2007. The deal has been structured "so that current Harman stockholders will have the opportunity to participate in the future upside potential of the enterprise," according to the Harman press release.
In the press release, Dr. Sidney Harman, who will continue his role as executive chairman of the company, stated, "KKR and GSCP are two of the world's leading private equity investors and our Board of Directors strongly believes that this transaction will create attractive long-term opportunities for our employees, customers, and business partners."
The collection of brands assembled under the Harman name are of course very familiar to those in our industry: JBL Professional, dbx Pro, Crown International, Studer, Soundcraft, AKG Acoustics, BSS Audio, and Lexicon Pro. The global corporation also includes familiar MI and consumer brands like Digitech, DOD, Harman-Kardon, Mark Levinson, Harman-Becker, and Infinity. Just prior to the announcement of the pending sale, Harman announced record profits for the third quarter of their fiscal year. "Net sales for the third quarter were $882.8 million compared to $801.5 million during the same period last year, an increase of 10 percent," says the corporate statement.
For a 50-day period, Harman can entertain other bids for the company. Under the agreement, Harman shareholders will have the option of selling their shares outright at a rate of $120 per share or exchange Harman holdings for a stake in the company to be formed as a new Harman owner, up to an approximate 27 percent stake.