Masimo sells off its consumer audio division to a new owner
**Masimo Sells Sound United to Harman International: A Strategic Shift**
In a significant move, Masimo Corporation, a leading medical technology company, has agreed to sell its Sound United consumer audio portfolio to Samsung Electronics' Harman International unit for $350 million. The sale, which is expected to close by the end of 2025, subject to regulatory approvals, marks a strategic shift for Masimo as it refocuses on its core medical technology business.
The acquisition of Sound United by Masimo in February 2022 was a bold step into the consumer audio market, adding notable brands such as Bowers & Wilkins (B&W), Denon, Definitive Technology, Marantz, and Polk Audio to its portfolio. However, the sale to Harman International signifies a return to Masimo's roots, with a focus on healthcare and medical technologies.
The sale is expected to generate a cash influx for Masimo, which can be used to invest in its core medical technology business, potentially enhancing its financial performance. The decision might also reflect a strategic shift in Masimo's leadership priorities, with a focus on healthcare and medical technologies rather than diversifying into consumer electronics.
The sale of Sound United is one of the main objectives achieved by the new Masimo board, following a two-year battle with activist shareholder Politan Capital Management, who won a majority of seats on Masimo's board. Masimo is also targeting cost reductions and has not revealed any new M&A activities.
However, Masimo is currently facing challenges. A cyberattack on some of its manufacturing facilities has disrupted its website and several computer systems, although it is not expected to affect its financial guidance. The company has developed mitigation plans for the tariff impacts, including adjusting product sourcing and operations. The cyberattack has impacted Masimo's ability to fulfill orders, and the patient monitoring company has disclosed a cybersecurity incident that is limiting its operations.
Despite these challenges, BTIG analyst Marie Thibault believes Masimo's counteractions will likely be enough to achieve its financial guidance. Masimo has lowered its 2025 earnings per share forecast due to the impact of tariffs, expecting a reduction of 45 cents to 50 cents, to a range of $4.80 to $5.15.
In conclusion, Masimo's sale of Sound United to Harman International is a strategic move aimed at refocusing on core competencies and enhancing financial performance. While the company faces challenges, including a cyberattack and tariff impacts, analysts remain optimistic about its ability to meet its financial guidance.
- Masimo's decision to sell Sound United to Harman International for $350 million will enable the company to reinvest in AI-driven medical devices, a key part of its core medical technology business.
- With the sale, Masimo aims to streamline its business operations, focusing solely on healthcare and healthcare technologies, hoping to improve earnings and boost its standing among rivals in the healthcare analytics sector.
- The strategic shift will likely impact the entire medical technology landscape, with competitors such as Philips, GE Healthcare, and Siemens now facing stronger competition in healthcare technology solutions.
- Meanwhile, the news of the sale has drawn attention from venture capitalists, who see the move as an opportunity to support promising startups in the medical devices sector, driving innovation and growth.
- Financial analysts at Morgan Stanley and Goldman Sachs have cited Masimo's recent moves as evidence of the growing importance of healthcare technology, predicting a surge in healthcare technology M&A activity in the near future.
- As technology advances and healthcare becomes more data-driven, Masimo's strategic shift demonstrates that companies must prioritize cybersecurity measures to protect crucial patient data while maintaining market competitiveness.
