Harman/Kardon to be purchased for $8billion

aaharvel
aaharvel Posts: 4,489
edited April 2007 in The Clubhouse
no joke.

http://users1.wsj.com/lmda/do/checkLogin?mg=evo-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB117759424075483410.html%3Fmod%3Dtechnology_main_whats_news
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  • ninerbj
    ninerbj Posts: 870
    edited April 2007
    So, who bought them?
    "she had the body of Venus, with arms."
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  • bobman1235
    bobman1235 Posts: 10,822
    edited April 2007
    The article says some private firms... I don't really understand these kinds of corporate buyouts.
    If you will it, dude, it is no dream.
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  • jflail2
    jflail2 Posts: 2,868
    edited April 2007
    KKR is a private equity firm. Prior to the EOP/Blackstone deal, they had the record for the largest LBO in history when they bought out Nabisco (EOP's record has since been broken.)

    Basically, these private equity firms are looking for any and all accretive deals. When Blackstone bought EOP for $38B (including debt) people were screaming that RE had gotten out of control, they were paying too much of a premium, etc. Here it is just a couple of months later, and they have sold most of EOP's portfolio to private property purchasers, and are probably already getting close to being "in the black" in regards to the EOP deal.

    Basically, companies like KKR and Blackstone are private equity funds. They use people's money that they have under management (read: rich folks) to invest in/acquire companies. Something like over 1,000 companies were acquired by private equity funds last year.

    They can use this investment in a couple of different ways. They can "asset strip", or part out the company's assets like Blackstone is doing to EOP. Or they can hold the investment (or company) for a few years, and then resell the company (or "re-ipo" it) and garner the profits from the public market.

    I guess the ideal situation for the acquired company is for a private equity fund to invest in said company that has dropped the ball in recent years, turn the company around, and sell it for a tidy profit.

    Hope that makes sense, my brain's all over the place today :/
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  • markmarc
    markmarc Posts: 2,309
    edited April 2007
    The question is: What about Harman Int'l makes it so attractive to KKK? or did Dr. Harman finally decide to retire?
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  • billbillw
    billbillw Posts: 6,711
    edited April 2007
    Just to be clear, this is Harmon Intl. getting bought, not just H-K. Harman is parent to Infinity, JBL, Revel AKG, Mark Levinson, Lexicon, Crown, Studer, DBX, and many more.
    For rig details, see my profile. Nothing here anymore...
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  • aaharvel
    aaharvel Posts: 4,489
    edited April 2007
    markmarc wrote: »
    The question is: ...did Dr. Harman finally decide to retire?

    Dr. Harman is staying on as chairman - or whatever his present position is with the company. He's not retiring.
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  • jflail2
    jflail2 Posts: 2,868
    edited April 2007
    And that is also a somewhat unique deal in that around 8M shareholders can choose the price per share OR ownership in the new company. You don't see that much....

    And its KKR not KKK; different group entirely :)

    What did KKR see in Harman? Possibly an inefficient management team, inefficent production/distribution methodologies, etc. I would assume all of this will be detailed in the merger release.

    Thank God its not my covered industry, so I don't have to bother with it :)
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