Dive Brief:
- Masimo said Tuesday it agreed to sell its Sound United consumer audio portfolio for $350 million to Samsung Electronics’ Harman International unit, freeing the company to focus on its professional healthcare business. The sale is expected to close by the end of 2025, subject to regulatory approvals.
- The $1 billion acquisition of Sound United in 2022 was at the center of a proxy fight that ultimately led to the resignation of Masimo founder and longtime CEO Joe Kiani.
- Masimo lowered its 2025 earnings per share forecast due to the impact of tariffs but maintained its revenue outlook in its first-quarter earnings release. The patient monitoring company also disclosed a cybersecurity incident that is limiting its ability to fulfill orders.
Dive Insight:
The sale price for Sound United, whose brands include Bowers & Wilkins, Denon and Marantz, is at a steep discount to what Masimo paid for the business three years ago.
When Masimo bought Sound United, Kiani championed the acquisition as an opportunity to leverage the company’s consumer expertise, but investors questioned the strategy. Activist shareholder Politan Capital Management, arguing the deal and subsequent selloff in Masimo’s shares were the result of poor management, won a majority of seats on the company’s board after a two-year battle. Kiani left the company soon after.
In finding a buyer for Sound United, the new Masimo board has achieved one of its main objectives, said Vice Chairman Quentin Koffey.
BTIG analyst Marie Thibault, in a note to investors Tuesday, called the Sound United sale a positive for the company and noted that Masimo would have increased its profit forecast if not for the impact of tariffs. Thibault believes the company's counteractions will likely be enough to achieve its financial guidance.
Masimo expects tariff impacts would reduce its 2025 non-GAAP earnings per share by 45 cents to 50 cents, before any tariff mitigation, to a range of $4.80 to $5.15. The company said it has developed mitigation plans that it will reassess and modify as needed, including adjusting product sourcing and operations.
The cyberattack on some of its manufacturing facilities, which Masimo discovered on April 27 and disclosed in a securities filing, disrupted the company’s website and several computer systems but is not expected to affect its financial guidance.
