Sound United Sold To Masimo
 

This one passed me by until this morning. Not sure how this will work out since it doesn't appear to be a good match. At least not on paper.

OTOH maybe having access to more capital for R&D will help move some lines forward. Never liked it when Marantz dropped its line of separates and Denon has been just sort of hanging around of late.

Time will tell.

https://www.soundunited.com/news/sou...mo-corporation

Hmmm, not what I expected for a partnership

Anyone understanding the synergy here?

None. Makes no sense.

Masimo investors are not happy either.

https://www.fool.com/investing/2022/...tanking-today/

Wait a second… I first read this and thought some foreign company bought sound united… ok. Then I read the blurb! I’m in healthcare and it’s that Masimo company, I didn’t even realize it. I’m specifically used to seeing/using their products so I’m in agreement. What the heck is going on here?

Mitch

If you are feeling poorly your stereo will tell you what's wrong? :thumbsup:

Hard to believe they paid over $1BUSD for United.

The question is, what is total revenue for all Sound United's companies/holdings?


"Masimo Reports Fourth Quarter and Full-Year 2021 Financial Results and Announces Agreement to Acquire Sound United. Fourth Quarter 2021 Highlights: Product revenue increased 11.0% to*$327.6 million, GAAP net income per diluted share was $1.18; and.Feb 15, 2022"

Given the numbers above, 3X multiplier is not a surprising bid.

Those numbers are for Masimo, Q4.
Sound United (is) was privately held so we don’t know how it performed.
Apart from headphones, the high end audio business is about $1Bn/yr total, all players, all in.

Sound United Sold To Masimo
 

Speaking from fairly recent personal experience, a 5 multiple of EBITDA is a low price in today's M&A environment, and a 10-15 multiple not unheard of when a buyer expects big economic and/or strategic synergies. The acquisitions market for small to mid-sized companies has been very hot the last few years. If Masimo really paid $1b, Sound United may be around $100m EBITDA and around $600m revenues, assuming EBITDA of around 15%. Masimo's revenues look to be about $1.3b annually, so a $1b acquisition is a huge bite for them. No wonder investors are unhappy.