Interesting article about Who Masimo should sell Sound United Brands to

heiney9

https://futureaudiophile.com/bold-predictions-on-who-will-buy-masimos-sound-united-brands/?fbclid=IwZXh0bgNhZW0CMTEAAR0WMCKZA7SbCKfnygM5-GRVMcpItQ_V7p7duBCfjGJlTJ6-XdKfQhUUud4_aem_7nkOGC129rZUbMt7fBj20A

Maybe this has been circulating already. This is the first I've seen it.

H9

pitdogg2

That is a GREAT article Brock, thanks for posting, I cannot argue with any of it, it has been a dumpster fire of a business plan with Masimo.

mhardy6647

Yes, very interesting piece. Thanks very much for sharing the link!
Andrew Jones & Polk -- could be fun.
Apple and Sound United brands... no. oh, lordy, please... just... no.

Kex

That’s not an article. That’s an opinion piece, and it’s all over the map. Chaos. Random speculation.

Apple will NEVER buy any part of Sound United in my opinion.

mrbigbluelight

That's not an article. That's an opinion piece

Well...Duh 🙄

Viking, we need a grammar and logic check on Aisle 3 please 🤔

Kex

There is so much wrong with this train wreck.

Firstly, Joe Kiani, CEO at Masimo (his legal name is Massi Kiani), has repeatedly said that he wants to remain CEO of the new consumer unit, as well as CEO of Masimo’s medical devices business. He has also said that he does not want to spin anything off. He wants a partner to bring in $1B to help with funding for the new unit, which has been piling up losses and will remain a part of Masimo. The losses at the consumer division have angered Masimo investors and there is currently a prolonged, messy battle for board positions waged by activist investors intending to wrench control of Masimo from Kiani.

Secondly, Apple was accused of copying Masimo pulse oximeter technology, which they deny. Absolutely nothing to do with HEOS. So no. Apple will not be buying anything to acquire HEOS technology.

Thirdly, Apple won’t be paying billions to Masimo. They abruptly removed the feature from their watches last year following the USITC* ruling but have been ordered to pay nothing so far. Not billions. Not even millions. Nothing. In fact, Apple has countersued Masimo for copying the Apple Watch for their own watch design, which is part of the consumer division that will be separated from the medical devices division.

The court case against Apple ended in a mistrial in May 2023, so no, it wasn’t a victory for Masimo, who have stated that they intend to appeal. The USITC judgement was in October 2023.

* International Trade Commission

txcoastal1

Masimo has been battling with Apple for a decade. Masimo should have been a supplier to Apple tech instead of an adversary. Like it or not Apple owns the largest market share of health oriented watches as it is a small part of the whole pie and integration to PC, tablets, and phones

Masimo could have contracted and partnered the HEOS to develop for the Apple devices for a fraction of the cost.

Masimo is not an investment group for audio as you can see…time to change CEO’s IMHO

mrbigbluelight

He wants a partner to bring in $1B to help with funding

Based upon his past performace and leadership skills I assume that hedge fund managers are fighting tooth and nail to
supply Senor Kiani with unlimited funds for whatever projects he envisions.
"Kiani the Magnificent" is how he is viewed, I'm sure

Kex

No, not so much.

He’s made a career recently of suing other companies, who usually just settle because anti-trust litigation is horrendously expensive and the outcomes are highly unpredictable (see also the ridiculous ruling against the NAR for housing sales).

He hasn’t been able to maintain the momentum at Masimo. Not many agreed with the wisdom of the Sound United purchase. Very much a head scratcher at the time. That has turned out to be prescient, since the purchase, which was financed to the tune of $1B, has been dragging down quarterly results ever since.

If the activists at Politan get two more directors (they recently added two already), out of a proposed total of seven, then they will likely force the sale of Sound United against Kiani’s wishes. That’s the currently prevailing CW anyway.

mrbigbluelight

I should have posted a "WARNING: SARCASM ALERT" on my previous post.

Kex

👆 I should have mentioned in my response that I was aware of that… 😉 ✌️

Emlyn

One thing to follow is if the company is producing new product across it's A/V product lines. I'm not tracking all of them, but seems not much new introduced recently from the couple I do follow. Would require R&D and marketing money allocation.

https://www.masimo.com/en-us/content-pages/audio-brands.html

Last post to their Youtube training channel was 3 months ago.

https://www.youtube.com/@SoundUnitedTraining/videos

mrbigbluelight

Management is considering returning to an earlier, yet very effective, training regimen.

https://youtu.be/ax7wcShvrus?si=aXgMDKHvJQZ6MUB2

Kex

I don’t see Masimo spending borrowed money (at today’s rates) on R&D.

They’re already fighting off a full on investor revolt trying to wrest control of the board because of the acquisition cost of Sound United and how that weighs on financial performance.

They haven’t even launched their health monitoring watch… maybe because they’re worried Apple might be able to sue them for IP transgressions.

I don’t see even more borrowing for R&D in their near term future.

Mr. Kiani must see things differently if he wants to remain in charge of the new consumer division he wants to create.

Kex

This just in:

Glass Lewis Highlights Urgency and Need for "Swift Investor Action" at Upcoming Meeting Given the "Restricted, Myopic and Poorly Monitored Process" To Separate Masimo’s Consumer Business That Has Been "Spearheaded by Mr. Kiani"

Concludes There Is a "Wealth of Evidence" That Mr. Kiani "Runs Roughshod" Over the "Largely Self-Selected" Board Which Remains "Seemingly Disinterested" in Accountability and Oversight

Notes That the Stakes Are "Substantially Higher Than Last Year" and That Addition of Both Politan’s "Highly Credible, Capable and Independent Nominees" – Darlene Solomon and William Jellison – Is Necessary To Help Masimo Address Its "Battery of Oversight Issues"

Kex

Also this:

Masimo MASI recently announced that, on Jul 2, it received a non-binding term sheet confirmation from a third party, which included an acquisition offer for MASI’s consumer business. MASI did not provide any details about the third party.

Masimo and the third party entered into a non-binding term sheet in May to sell the majority stake in MASI’s consumer audio and consumer health businesses. The third party offered to acquire a stake in MASI’s consumer business for a purchase price in the range of $850 million to $950 million, on a cash and debt-free basis, following the completion of six weeks of due diligence.

Apart from the undisclosed third party, one to two other companies may join the offer to form a potential joint venture, per the term sheet. Masimo and the third party are currently in discussions for finalizing acquisition-deal terms, including the grant of certain intellectual property rights to the venture to be formed following the separation of the consumer business.

Masimo had paid more than a billion dollars to acquire Viper Holdings Corporation, which owns Sound United, adding the consumer business to its portfolio in 2022. The current term sheet offer is lower than the acquisition price paid by Masimo, implying a potential loss for shareholders. Masimo currently continues to evaluate options that will help it get an optimal value-maximizing structure for its consumer business, including the active consideration of a possible spin-off of the consumer business into a new public company.

Kex

And as if that weren’t enough, Masimo will be under intense pressure to come clean about their plans for the consumer division by the next quarterly report which should be some time in August.

They just released a preliminary report this week, which shows healthy revenue growth, but, hidden in those numbers is a 21-22% decline YTD in non-healthcare revenue.

mhardy6647

Kex wrote: »

This just in:

Glass Lewis Highlights Urgency and Need for "Swift Investor Action" at Upcoming Meeting Given the "Restricted, Myopic and Poorly Monitored Process" To Separate Masimo’s Consumer Business That Has Been "Spearheaded by Mr. Kiani"

Concludes There Is a "Wealth of Evidence" That Mr. Kiani "Runs Roughshod" Over the "Largely Self-Selected" Board Which Remains "Seemingly Disinterested" in Accountability and Oversight

Notes That the Stakes Are "Substantially Higher Than Last Year" and That Addition of Both Politan’s "Highly Credible, Capable and Independent Nominees" – Darlene Solomon and William Jellison – Is Necessary To Help Masimo Address Its "Battery of Oversight Issues"

Wow. "they" certainly cornered the "market" on "spurious quotation marks"!
@Viking64 -- heh. Beat "you" to "it".

mhardy6647

https://www.audioholics.com/editorials/is-apple-plotting-a-sound-united-buyout-from-masimo
https://www.channelnews.com.au/masimo-consumer-is-for-sale-is-premium-audio-company-next-as-vox-admits-to-asset-sales-following-sales-slump/

Wars Buyouts and rumors of wars buyouts.