The hi-fi and AV industry is undergoing tremendous change and big brands like Bowers & Wilkins (B&W), Denon, Marantz, Polk Audio, Classé and Definitive Technology are now facing an uncertain future as their owner Masimo, which makes smart health wearables and monitors, is looking for a buyer and has not found one yet.
All these brands were under Sound United and they included Bowers & Wilkins, Denon, Marantz, Polk Audio, HEOS, Definitive Technology, Classé and Boston Acoustics at that time.
All these brands ended up with Masimo when it acquired Sound United in April 2022 for US$1 billion.
A check with Masimo’s website revealed that HEOS has been spun off into its segment for cloud computing technology that enables all integrations with music services, voice assistants, third-party and automation companies, Masimo health hub connectivity, device analytics and software updates.
Under ‘Masimo Audio” are these brands — B&W, Denon, Marantz, Definitive Technology, Classé and Polk Audio. Missing is Boston Acoustics.
The issue is that the Masimo Audio segment has been losing money and the share price of Masimo has plummeted resulting in the departure of Masimo founder Joe Kiani in September.
Reuters reported on Sept 25: “Masimo said on Wednesday founder Joe Kiani has decided to step down as the medical device maker’s CEO, days after shareholders voted to remove him from the company’s board following a bitter proxy battle with activist hedge fund Politan Capital Management.
“The company named veteran healthcare executive, Michelle Brennan, as interim chief. Brennan was nominated by Politan for Masimo’s board last year, along with the hedge fund’s founder Quentin Koffey. Both were subsequently elected by shareholders.
“The stock has fallen more than 40% since Feb 15, 2022, when Masimo announced the US$1-billion acquisition of audio products maker Sound United. The deal was a key factor behind Politan’s activism.”
Australian news website ChannelNews reported on Nov 8 that at a briefing to analysts Micah Young, Executive Vice President & Chief Financial Officer at Masimo said when asked about the future of the former Sound United business: “We will continue to update the market on the work of the management team, in partnership with the board’s Business Review Committee.
“We expect to provide the next update in January 2025. With regard to our strategic review process, the board has not made a final determination of the manner in which the consumer business will be separated. If, among other things, the board anticipate treating the consumer business as a discontinued operation. Upon those decisions being finalised, further, we would exclude the results for our non-GAAP earnings, and no longer provide guidance for this segment if it still remains with the company into the first quarter of 2025.”
ChannelNews understands that Masimo executives have spoken to several potential buyers but at this stage and due in part to falling revenues and losses have failed to find a buyer for the business.
