decor decor
"The cars we drive say a lot about us."

-Alexandra Paul

Samsung to Buy Harman International Industries

Financial Information
  • Enterprise Value                           $8.6 billion
  • EV/LTM Revenue                         1.22x
  • EV/LTM EBITDA                          10.16x
Transaction Facts
  • Samsung Electronics (KOSE: A005930) announced Monday that it entered into an agreement to acquire Harman International Industries (NYSE: HAR), a US technology manufacturer with a strong automotive presence.
  • The deal values Harman at $112 per share in cash, a 28% premium over the company’s Friday closing price. Harman shares rose 25% today, closing at $109.72 per share.
  • Harman is itself the product of several significant acquisitions, growing from its audio roots into software development and car connectivity technology. Last year it acquired technology providers Symphony Teleca and Red Bend Software for $780 million and $170 million, respectively, boosting wireless connectivity capabilities.
  • Samsung has historically not been a significant participant in M&A, but has recently bought SmartThings, LoopPay, Joyent and other technology and related services providers.
Branching Into a Massive Market
  • Not Just a Phone Company: Samsung’s heavy reliance on smartphones has caused significant concern, especially with the Galaxy Note 7 fiasco earlier this year. Cars today include screens, chips and other electronics produced by Samsung – and Harman’s dominant market position will help the company leverage a growing industry. Last month, Qualcomm agreed to acquire NXP Semiconductors for $39 billion – giving it control of the largest chip developer for automobiles in a similar diversification move.
  • Traffic Jam: Samsung is jumping into an industry long-courted by other tech giants, but it is staying safely away from the expensive and risky bleeding edge favored by other tech manufacturers. Alphabet has long researched self-driving cars, while Apple’s top-secret Project Titan is widely thought to be its own version of a self-driving car.
  • Culminating a Long Process: Samsung’s first exposure to the automotive industry came in 1994 when the company started Samsung Motors (in which it retains a minority interest following a sale to Renault). But this transaction represents the conclusion of a task force organized last year to identify the best way to secure an established presence in what was seen as key market.
For more information about this transaction, click here to read the press release.
martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

09 May 2023

DynamicsCon LIVE Conference Information

martinwolf will be attending the DynamicsCon LIVE conference in Scottsdale May 22-25. Book a confidential one-on-one meeting with Michael Rosholt to learn about market trends, current valuations, and how to prepare for a sale.    DynamicsCon attendees are also eligible for a complementary M&A Readiness Scorecard from martinwolf.   Contact Michael Rosholt at mrosholt@martinwolf.com to...

22 Feb 2023

How Microsoft Channel Partners Can Command High Valuations

In today’s rapidly changing ecosystem, simple organic growth doesn’t give Microsoft Channel Partners long-term competitive advantage.   During the last five years, Microsoft Channel Partners have commanded high valuations due to strong and sustainable business models, as well as a track record of profitability. Most were small mid-market businesses that had to decide to be...

31 Jan 2023

Rising Interest Rates Chill Private Equity Pace

After a year of strength on the private equity front, 2022 is now in the rearview mirror and industry professionals anticipate a downgrade in performance for the coming year.   Despite the fluctuations of the past few years, private equity has withstood the challenges relatively well. However, in certain areas such as exit activity and...