Masimo Sells off Consumer Audio Division to a New Owner
In a surprising turn of events, Masimo, a leading player in the healthcare technology industry, has announced the sale of its Sound United consumer audio portfolio to Samsung Electronics' Harman International unit for $350 million. This move comes just three years after Masimo's acquisition of Sound United for over $1 billion, marking a significant shift in the company's business strategy.
The initial acquisition in 2022 was expected to diversify Masimo's portfolio and venture into the consumer audio market. However, the subsequent sale in 2025, at a steep discount to the original purchase price, suggests a strategic pivot or financial adjustment. Quentin Koffey, Vice Chairman of Masimo, has stated that finding a buyer for Sound United was one of the company's main objectives.
The sale is subject to regulatory approvals and is expected to close by the end of 2025. This move will free Masimo to focus on its professional healthcare business, allowing the company to streamline its operations and target cost reductions.
Meanwhile, Masimo is also grappling with a cyberattack that was discovered on April 27. The attack has disrupted Masimo's website and several computer systems, but the company maintains that it will not affect its financial guidance. The incident has been disclosed in a securities filing, but no further details have been provided.
Masimo's leadership is also undergoing a transition. Founder and longtime CEO Joe Kiani resigned after a two-year battle with activist shareholder Politan Capital Management, who won a majority of seats on Masimo's board. The impact of these leadership changes on the company's strategic decisions, including the acquisition and sale of Sound United, is not explicitly reported.
BTIG analyst Marie Thibault has called the Sound United sale a positive move for the company, believing that Masimo's counteractions will likely be enough to achieve its financial guidance, which has been impacted by tariffs. Masimo expects its 2025 non-GAAP earnings per share to be reduced by 45 cents to 50 cents due to tariff impacts, before any mitigation, to a range of $4.80 to $5.15. The company has developed mitigation plans, including adjusting product sourcing and operations.
In summary, Masimo's sale of Sound United to Harman for $350 million marks a strategic shift in the company's business strategy regarding the consumer audio market. The cyberattack, while disruptive, is not expected to affect the company's financial guidance. Meanwhile, Masimo's leadership is undergoing changes, and the impact of these changes on the company's strategic decisions is yet to be fully understood.
- Masimo's decision to sell Sound United, a consumer audio portfolio, to Samsung Electronics' Harman International unit for $350 million indicates a strategic pivot in the company's business strategy, contrasting with their original acquisition of Sound United for over $1 billion in 2022.
- Despite the cyberattack that has disrupted Masimo's website and several computer systems, the company maintains that it will not impact its financial guidance, as stated in a securities filing.
- In the healthcare technology industry, Masimo's sale will allow the company to focus on its professional healthcare business, aiming to streamline operations and target cost reductions.
- BTIG analyst Marie Thibault considers Masimo's sale of Sound United a positive move, suggesting that Masimo's counteractions will likely be sufficient to achieve its financial guidance, which has been impacted by tariffs.
- Amidst the sale and leadership changes, the impact of activist shareholder Politan Capital Management on Masimo's strategic decisions, including the acquisition and sale of Sound United, remains unclear.
- Masimo is also working on mitigation plans, including adjusting product sourcing and operations, as it expects its 2025 non-GAAP earnings per share to be reduced by 45 cents to 50 cents due to tariff impacts.
