In a stunning finale to one of the most expensive corporate missteps in recent memory, medical tech company Masimo is offloading its Sound United consumer audio division to Samsung's HARMAN International for just $350 million — a jaw-dropping $680 million less than the $1.03 billion it paid only three years ago.
This isn't just a business transaction; it's the closing chapter of a bitter corporate drama that cost founder Joe Kiani his job after a 35-year run and sparked a two-year boardroom civil war that transformed the company's leadership.
"Finding the right home for this business has been a stated priority of the new Board from day one," said Quentin Koffey, Vice Chairman of Masimo's Board of Directors in today's announcement. What he didn't mention: that "new Board" exists because activist investor Politan Capital Management fought and won a proxy battle specifically over this disastrous acquisition.
The trouble began in 2022 when then-CEO Joe Kiani orchestrated the billion-dollar purchase of Sound United, bringing premium audio brands like Bowers & Wilkins, Denon, and Marantz under Masimo's medical device umbrella. Wall Street reacted with confusion and skepticism - what did pulse oximeters have to do with high-end speakers?
Denon, in particular, has been a cornerstone of audiophile culture since its founding in 1910, pioneering innovations in high-fidelity sound reproduction for over a century. With its legendary reliability and award-winning sound quality, Denon has cultivated a fiercely loyal customer base that spans generations. Its AV receivers consistently rank among the most highly rated in consumer satisfaction surveys, and the brand has successfully navigated digital transitions that have claimed many of its rivals.
The acquisition quickly became the centerpiece of a bruising proxy contest. Politan Capital Management, led by activist investor Quentin Koffey, launched a campaign arguing that the Sound United purchase was an expensive distraction from Masimo's core healthcare business. Apparently, shareholders agreed.
The September 19 shareholder vote was brutal for Kiani - he lost his board seat and subsequently resigned as CEO, ending his 35-year leadership of the company he founded. Adding another layer of drama, Kiani filed a lawsuit in California related to his employment agreement, with analysts suggesting he's fighting for a "sizable special payment." Then in March, he filed a notice against 6 board members, seeking over $100 million in statutory penalties
With Kiani out, former Johnson & Johnson executive Katie Szyman has taken the helm as CEO. Her mission is clear: get back to basics. "Since I took over as CEO, a key objective has been refocusing our business to ensure we are allocating time and resources to areas of unmet clinical need," Szyman stated in today's release.
While Masimo licks its $680 million wound, HARMAN (and by extension, Samsung) is quietly celebrating. They just acquired a prestigious portfolio of audio brands for roughly a third of what Masimo paid in 2022.
"This acquisition represents a strategic step forward in the expansion of HARMAN's core audio business," said Dave Rogers, President of HARMAN's Lifestyle division. Translation: They just got Bowers & Wilkins, Denon, and Marantz at a massive discount.
HARMAN's existing brand roster includes JBL, Harman Kardon, and Mark Levinson. JBL, in particular, has experienced a remarkable year, with its home audio products seeing double-digit growth amid the home entertainment boom. Consumer Electronics Association data shows JBL capturing significant market share in both soundbars and wireless speakers, making the timing of this acquisition particularly favorable for consolidating HARMAN's dominant position in the audio market.
For audio enthusiasts, there's a bittersweet element to seeing these beloved brands changing hands yet again. JBL's impressive performance makes its inclusion in this corporate reshuffling particularly poignant for many long-time fans who have followed the brand's resurgence.
This corporate saga offers a textbook example of what happens when companies venture too far from their expertise. Masimo built its reputation on precision medical monitoring technology - a far cry from the consumer audio world. The result was an expensive, distracting foray that cost nearly $700 million in shareholder value and ultimately ended the founder's career with Masimo.
For Masimo, the sale represents a painful but necessary step toward recovery. The transaction won't close until "the end of 2025," pending regulatory approvals, but it allows the company to finally focus on what it does best: healthcare innovation.
Meanwhile, audio enthusiasts might actually benefit from this corporate reshuffling. HARMAN has proven audio expertise and Samsung's considerable resources behind it, potentially meaning better support and development for these premium brands than they received during their brief, uncomfortable stay in the medical device family.
One thing's certain: business schools will be studying this acquisition-and-divestiture saga for years to come as a cautionary tale about the dangers of diversification without clear strategic alignment. Sometimes the most expensive lessons are the ones that teach us to stay in our lane.
Sometimes corporate reshuffling has unexpected benefits. While Masimo licks its financial wounds and refocuses on healthcare, audiophiles can take comfort knowing that some of the most respected names in sound are landing in more appropriate hands. Who knows – the next generation of Bowers & Wilkins, Denon, and Marantz products might actually benefit from this corporate game of musical chairs.
For now, we can celebrate that these audio icons have found a home with a company that actually understands what makes them special – and hopefully has the vision to preserve their legacy while guiding them into the future.
Looking beyond the corporate drama, I believe we'll see several positive developments from this acquisition. HARMAN's audio expertise should translate to better-focused product releases and potentially a renewed emphasis on both integrators and retail presence.
The best audio brands have always thrived on visibility. I remember the excitement of walking into Best Buy specifically to check out the latest Bowers & Wilkins speakers. Unfortunately, in recent years, these premium brands have been increasingly relegated to the back corners of retail spaces, making discovery difficult for new enthusiasts.
Under HARMAN's stewardship, we might see these iconic brands return to prominence in retail environments. Samsung's significant market presence and HARMAN's understanding of the audio space could create the perfect conditions for brands like Denon and B&W to reclaim their rightful place in the consumer consciousness.
The integration with HARMAN's existing portfolio might also lead to more cohesive product ecosystems that better serve today's connected consumers while still honoring the audio heritage that makes these brands special. With HARMAN also acquiring Roon in 2024, the combined footprint of these devices and connected platforms could give Sonos a run for its money, I for one would love to see all of these brands seamlessly integrating with each other. For the audio community, this could be the fresh start these beloved brands deserve.
