Harman International Industries

Harman International Industries, Inc.
Subsidiary
Industry Electronics
Founded 1980
Founders
Headquarters Stamford, Connecticut, U.S.
Key people
 Dinesh Paliwal
(President & CEO)
Products Audio, electronic, and infotainment systems for automotive OEM's, home and computer systems, Aha Radio for in-car entertainment from cloud, loudspeakers and electronics for audio professionals (concert halls, stadiums, airports, recording, broadcasting, and cinema)
Brands
Revenue Increase US$6.90 billion (2016)[1]
Increase US$804 million (2016)[1]
Increase US$580 million (2016)[1]
Parent Samsung Electronics
Website www.harman.com

Harman International Industries, Inc. (commonly known as Harman) is an American subsidiary of South Korea-based Samsung Electronics that produces, designs and engineers connected products for automakers, consumers and enterprises worldwide, including connected car systems; audio and visual products, enterprise automation; and connected services.[2] Headquartered in Stamford, Connecticut, Harman maintains major operations in the Americas, Europe, as well as Asia and markets its products under several brands; such as AKG, AMX, Crown, Harman Kardon, Infinity, JBL, Lexicon, dbx, DigiTech, Mark Levinson, Martin, Revel, Soundcraft, Studer, Arcam, and BSS Audio.

On November 14, 2016, Harman entered into an agreement to be acquired by Samsung.[3][4] The sale was completed on March 10, 2017.[5]

Early history

Sidney Harman and Bernard Kardon founded the predecessor to Harman International, Harman Kardon, in 1953. Both Harman and Kardon were engineers by training and had worked at the Bogen Company, which was then the top manufacturer of public address systems. Their collaboration helped to create a new industry: high-fidelity audio. Harman bought out his partner in 1956 and then expanded Harman Kardon into an audio powerhouse, according to a biography written by the Consumer Electronics Hall of Fame.[6]

Acquisitions and expansion

In the 60's, Harman Kardon grew more prosperous and acquired other audio houses (such as JBL)[7]. In the 1970s, Harman accepted an appointment in the Carter administration as deputy secretary of the Department of Commerce. When Harman took office in 1976 as head in charge, he sold his company to conglomerate Beatrice Foods to avoid a conflict of interest. Beatrice promptly sold many portions of the company, including the original Harman Kardon division, and by 1980 only 60% of the original company remained.

After he left government in 1978,[8] he created Harman International Industries and reacquired a number of businesses he sold to Beatrice. The company continued its growth plan with a string of acquisitions throughout the 1980s that pushed Harman International's sales from about $80 million in 1981 to more than $200 million by 1986, and then to more than $500 million by 1989. Harman International went public in 1986 with a stock offering on the New York Stock Exchange. Cash from that sale was used to, among many other purchases, buy Soundcraft, a U.K. producer of professional mixing boards, in 1988 and later - Salt Lake City digital electronics producer DOD Electronics Corp. By 1994, Harman International was selling consumer audio gear under such brands as JBL, Harman Kardon, Infinity and Epicure loudspeakers, as well as professional audio systems with such brands as JBL Professional, UREI, Soundcraft, Allen & Heath, dbx, Studer, DOD, Lexicon, AKG, BSS, Orban, Quested and Turbosound (the last one now under the control of Music Group[9]).

In July 2011, Harman acquired MWM Acoustics, a privately held company that specialized in speaker and microphone technology for consumer electronics and enterprise telephony. The combination of MWM Acoustics, Branded Audio, and AKG Automotive Microphones became the Embedded Audio Business Team.[10]

Harman expanded to include lighting in 2013 with the acquisition of Martin Professional.[11]

In June, 2014, Harman completed the acquisition of AMX LLC, from The Duchossois Group, bringing enterprise control and automation systems as well as audio/video switching and distributing to Harman's offerings.[12]

In March 2015, Harman acquired the automotive division of Bang & Olufsen for 145 million euros ($156 million) for the unit as well as technology license fees.[13] The purchase didn’t include Bang & Olufsen’s consumer-electronics business.[14]

In 2015, recognizing the increasing role of software and services in the markets it served, Harman expanded its capabilities around cloud, mobility and analytics with the acquisitions of Symphony Teleca, a software services company based in Mountain View, CA,[15] and Redbend, an Israeli-based provider of software management technology for connected devices, and over-the-air (OTA) software and firmware upgrading services.[16] With these additions, Harman announced the formation of a fourth division, which they called Connected Services.

In March 2016, Harman acquired the automotive cyber-security firm TowerSec.[17] This acquisition increased Harman's competencies in the emerging automotive cyber-security field. This was evidenced by the subsequent launch of the company's '5+1 security framework' incorporating TowerSec's 'ECU shield' technology.[18] This acquisition was notable for further demonstrating Harman's desire to expand beyond its traditional business areas of in-car audio and entertainment systems.[18]

In November 2016, Samsung Electronics decided to acquire the company for USD 8 billion in cash.[19]

In December 2016, Harman International Industries Inc. invested in a startup that makes projection displays that sit in front of car windshields, signalling a new area it plans to explore under the ownership of Samsung.

In February 2017, Harman International shareholders have voted in favor of the acquisition by Samsung.[20] On March 10, 2017, the acquisition is complete, with Harman becoming a subsidiary of Samsung Electronics.[5]

Private equity attempt

Harman International Industries was to disappear from NYSE in Q3/2007 due to a buy-out by KKR and Goldman Sachs Capital Partners.[21] However, as of mid September 2007, KKR announced they would back out of the deal. On the news, Harman shares plummeted by more than 24%.

Coincident with the buy-out deal, Dinesh C. Paliwal was hired as company President and CEO in July 2007. Paliwal was a veteran of the corporate turn-around. During his tenure as president of U.S. operations for ABB, the heavyweight Swiss-based automation provider, the company moved from a money-losing and siloed organization to one with double digit growth, doubled its share price in one year, and saw its bond ratings upgraded by Moody's and Standard & Poors.[22]

On July 1, 2008, Sidney Harman was succeeded by Dinesh Paliwal as Chairman of the Board.[23]

Brands

Number of employees

Table 1. Number of full-time employees (Approx.)
Fiscal Year Total North America Outside of NA
2016[24]26,0007,30018,700
Mar. 2016[25]29,000--
Feb. 2016[26]---
Sep. 2015[27]28,000--
2015[28]24,1976,79317,404
2014[29]14,2025,5998,603
2013[30]12,2214,5097,712
2012[31]11,3864,1697,197
2010[32]9,8163,3626,454
2008[33]11,6944,8346,860
2007[34]11,6885,6116,077

References

  1. 1 2 3 "Harman International Financial".
  2. ↑ "HARMAN Unveils New Logo, Signals Brand Evolution". HARMAN Newsroom. Retrieved 2016-01-11.
  3. ↑ Russell, Jon. "Samsung is buying Harman for $8B to further its connected car push". TechCrunch. Retrieved 2016-11-14.
  4. ↑ Mullen, Jethro (14 November 2016). "Samsung buys auto electronics company Harman for $8 billion". CNNMoney. Retrieved 14 November 2016.
  5. 1 2 "Samsung Electronics Completes Acquisition of HARMAN". news.samsung.com. Retrieved 2017-03-11.
  6. ↑ "Archived copy". Archived from the original on 2007-12-28. Retrieved 2008-10-24.
  7. ↑ http://br.harmankardon.com/history-hk-uk.html
  8. ↑ "Jimmy Carter: Department of Commerce Exchange of Letters on the Resignation of Sidney L. Harman as Under Secretary". Presidency.ucsb.edu. Retrieved 2016-08-28.
  9. ↑ "MUSIC Group". Turbosound.com. Retrieved 2016-08-28.
  10. ↑ "High Quality Audio - High Quality Audio - About Us". Embedded.harman.com. Retrieved 2016-08-28.
  11. ↑ "HARMAN Completes Acquisition of Entertainment Lighting Company Martin Professional". HARMAN Newsroom. Retrieved 2016-01-11.
  12. ↑ "HARMAN Completes Acquisition of AMX". HARMAN Newsroom. Retrieved 2016-01-11.
  13. ↑ Tom Lavell (2015-03-31). "Bang & Olufsen to Sell Car-Audio Unit to Harman in Focus Shift". Bloomberg. Retrieved 2016-08-28.
  14. ↑ "Harman Kardon acquires Bang & Olufsen Automotive". Bmwblog.com. Retrieved 2016-08-28.
  15. ↑ "HARMAN to Acquire Software Services Company Symphony Teleca | HARMAN". News.harman.com. 2015-01-22. Retrieved 2016-08-28.
  16. ↑ "HARMAN Completes Acquisition of Redbend". HARMAN Newsroom. Retrieved 2016-01-11.
  17. ↑ "HARMAN Completes Acquisition of TowerSec Automotive Cyber Security". HARMAN Newsroom. Retrieved 2016-09-17.
  18. 1 2 "Harman automotive cyber-security system". Deep Tread. Retrieved 2016-09-17.
  19. ↑ "Samsung's Harman Acquisition Puts Pressure On Apple And Tier 1 Auto Suppliers". Forbes.com. Retrieved 16 November 2016.
  20. ↑ "Harman International merger with Samsung Electronics approved by shareholders". Sammobile. Retrieved 23 February 2017.
  21. ↑ "KHI Parent Inc. - 'S-4' on 6/20/07". SEC Info. Retrieved 2016-08-28.
  22. ↑ By , , on June 1, 2006 (2006-06-01). "ABB Celebrates Turnaround". Automation World. Retrieved 2016-08-28.
  23. ↑ "Archived copy". Archived from the original on 2009-03-31. Retrieved 2008-10-24.
  24. ↑ "Harman News". HARMAN SEC Filing FORM 10-K. Retrieved Aug 11, 2016.
  25. ↑ "Harman News". Harman News. Archived from the original on June 11, 2016. Retrieved May 5, 2016.
  26. ↑ "Harman Twitter". Harman Twitter. Retrieved Feb 22, 2016.
  27. ↑ "Harman News". Harman News. Retrieved Sep 30, 2015.
  28. ↑ "FY15 SEC Form 10-K". HARMAN SEC Filing FORM 10-K. Archived from the original on September 9, 2015. Retrieved August 7, 2015.
  29. ↑ "FY14 SEC Form 10-K". HARMAN SEC Filing FORM 10-K. Retrieved August 7, 2014.
  30. ↑ "FY13 SEC Form 10-K". HARMAN SEC Filing FORM 10-K. Retrieved August 2, 2013.
  31. ↑ "FY12 SEC Form 10-K". SEC Gov Filing FORM 10-K. Retrieved August 3, 2012.
  32. ↑ "FY10 SEC Form 10-K" (PDF). Harman SEC Filing FORM 10-K. Retrieved August 4, 2010.
  33. ↑ "FY08 SEC Form 10-K". HARMAN SEC Filing FORM 10-K. Retrieved August 6, 2008.
  34. ↑ "FY07 SEC Form 10-K". HARMAN SEC Filing FORM 10-K. Retrieved August 6, 2007.
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