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Samsung Electronics to Acquire HARMAN, Accelerating Growth in Automotive and Connected Technologies

connected-car

Samsung Will Gain Significant Presence in Connected Car Market; Addressable Market Expected to Exceed $100 Billion by 2025

All-Cash Transaction Delivers Significant and Immediate Value to HARMAN Shareholders 

Creates End-to-End Solutions Powerhouse by Combining HARMAN’s Leadership in Infotainment, Telematics and Sound Management with Samsung’s Best-in-Class Connected Mobility Solutions, Semiconductors, User Experience (UX) and Displays

Accelerates Development and Time to Market for Connected Car and Autonomous Driving Innovation

Substantial Growth Opportunities Across Automotive, Audio, IoT and Professional Markets

Samsung Electronics and Harman International Industries, today announced that they have entered into a definitive agreement under which Samsung will acquire HARMAN for $112.00 per share in cash, or total equity value of approximately $8.0 billion.  Upon closing, the transaction will immediately give Samsung a significant presence in the large and rapidly growing market for connected technologies, particularly automotive electronics, which has been a strategic priority for Samsung, and is expected to grow to more than $100 billion by 2025[1].  HARMAN is the market leader in connected car solutions, with more than 30 million vehicles currently equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security.  Approximately 65% of HARMAN’s $7.0 billion of reported sales during the 12 months ended September 30, 2016 are automotive-related, and its order backlog for this market at June 30, 2016 was approximately $24 billion.

HARMAN’s experience designing and integrating sophisticated in-vehicle technologies, as well as its long-term relationships with most of the world’s largest automakers, will create significant growth opportunities for the combined business by enabling it to leverage Samsung’s expertise in connected mobility, semiconductors, user experience, displays and its global distribution channels.  In addition, the combination of HARMAN’s brands and audio capabilities and Samsung’s expertise in consumer electronics will deliver enhanced customer benefits and elevate user experiences across Samsung’s complete portfolio of consumer and professional products and systems.

“HARMAN perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time,” said Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics.  “As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognized portfolio of best-in-class products, HARMAN immediately establishes a strong foundation for Samsung to grow our automotive platform.  Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed deep respect for him, his strong senior leadership team and HARMAN’s talented employees.  HARMAN’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”

“The vehicle of tomorrow will be transformed by smart technology and connectivity in the same way that simple feature phones have become sophisticated smart devices over the past decade,” added Young Sohn, President and Chief Strategy Officer of Samsung Electronics.  “We see substantial long-term growth opportunities in the auto technology market as demand for Samsung’s specialized electronic components and solutions continues to grow.  Working together, we are confident that HARMAN can become a new kind of Tier 1 provider to the OEMs by delivering end-to-end solutions across the connected ecosystem.”

Dinesh Paliwal, HARMAN Chairman, President and CEO, stated, “This compelling all-cash transaction will deliver significant and immediate value to our shareholders and provide new opportunities for our employees as part of a larger, more diversified company.  Today’s announcement is a testament to what we have achieved and the value that we have created for shareholders.  Samsung is an ideal partner for HARMAN and this transaction will provide tremendous benefits to our automotive customers and consumers around the world.  Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with HARMAN’s technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers.  Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace.  This transaction will bring HARMAN and Samsung’s complementary strengths together to accelerate innovation in this space.  More broadly, this investment underscores the strength of HARMAN’s employees, as well as our success and leadership across our markets.  We look forward to working together with Samsung to elevate experiences for consumers worldwide.”

Customer Benefits and Significant Growth Opportunities

Samsung expects the combination to deliver significant growth opportunities and benefits to customers by leveraging Samsung’s and HARMAN’s complementary technologies, resulting in increased market penetration across important end markets.

  • Automotive:  Combining HARMAN’s leadership in new connected car technologies, including its top positions in infotainment, cyber security, over-the-air updates and telematics, with Samsung’s significant expertise and experience in connectivity technologies, including 5G, UX/UI, display technology and security solutions, will enhance HARMAN’s automotive and connected services businesses to drive greater sales and provide significant benefits as automakers speed the adoption of next-generation connected cars.
  • Audio:  HARMAN’s leading brands and cutting-edge audio systems include JBL®, Harman Kardon®, Mark Levinson®, AKG®, Lexicon®, Infinity®, and Revel®.  The company also licenses Bowers & Wilkins® and Bang & Olufsen® brands for automotive.  All of these brands will greatly enhance the competitiveness of Samsung’s mobile, display, virtual reality and wearable products to deliver a fully differentiated audio and visual experience for customers.
  • Professional:  The combination will also expand the combined company’s business-to-business platform through its ability to deliver integrated, large-scale audio and visual professional solutions at stadiums, concert facilities and other performance centers such as The John F. Kennedy Center for the Performing Arts and STAPLES Center – home of the GRAMMY Awards®.
  • Connected Services:  Samsung will gain access to HARMAN’s 8,000 software designers and engineers who are unlocking the potential of the IoT market.  This collaboration will deliver the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data and devices.

Operating Structure and Leadership

Upon closing, HARMAN will operate as a standalone Samsung subsidiary, and continue to be led by Dinesh Paliwal and HARMAN’s current management team.  Samsung is pursuing a long-term growth strategy in automotive electronics, and plans to retain HARMAN’s work force, headquarters and facilities, as well as all of its consumer and professional audio brands.  Samsung believes the combination will increase career development and advancement opportunities for the employees of both companies.

Samsung’s Automotive Electronics Business Team, which was established in December of 2015 to identify opportunities for Samsung in the automotive sector, will work closely with the HARMAN management team to realize the full growth potential of the combination.

Terms of the Transaction

The purchase price represents a premium of 28% based on HARMAN’s closing stock price on November 11, 2016 and a 37% premium to HARMAN’s 30-calendar day volume weighted average price ending November 11, 2016.  Samsung expects to use cash on hand to fund the transaction.  The agreement has been unanimously approved by the boards of directors of both companies.

The transaction, which is subject to approval by HARMAN shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017.

Source: Harman

BigChange selects Samsung to roll out service management platform for Apprentice 2015 winner Joseph Valente

Samsung Electronics Co., Ltd., today announced that it has been chosen as the preferred partner of BigChange Apps to roll out its JobWatch mobile app for ‘The Apprentice’ winner Joseph Valente’s plumbing company Impra Gas. The service management platform has been installed exclusively on Samsung Galaxy Tab Actives and will be used by Valente’s new company, which he recently launched after winning the £250,000 investment from Lord Sugar.

“We’re really excited to be working with BigChange and Impra Gas on this project. Before any new business can get off the ground, it needs to have the structure in place to manage its workforce effectively, particularly one with employees out in the field,” said Graham Long, VP for the Enterprise Business Team, at Samsung UK and Ireland. “Joseph has got some really ambitious plans for Impra Gas and through the JobWatch system and our tablets he will have the tools he needs to grow as quickly as he can.”

 

JobWatch, an all-in-one system for planning, managing, scheduling and tracking mobile workforces, will allow Valente to manage his workforce out in the field using Samsung Galaxy Tab Actives and help improve overall customer service. Through JobWatch, customers will be able to book jobs, which will be automatically scheduled to the correctly skilled engineer on a mobile app, who will have the health and safety, compliance and job instructions all at hand through their tablet. Customers will receive live updates confirming the estimated time of arrival for the engineers and receive electronic job cards including certificates related to the job performed. The new partnership will replace manual planning and paperwork and provides an efficient way to keep the office in sync with the mobile teams.

 

Samsung was chosen because its Galaxy Tab Active has an IP67 rating with dust and waterproofing, meaning the tablet is equipped to resist the drops and knocks that occur for plumbers every day on the job. The inbuilt stylus means the JobWatch app can also be used by workers with gloves on and the HD camera ensures that employees take photos for site surveys and proof of work easily. Invoicing will also be prompt thanks to the excellent 4G connectivity of Samsung Galaxy Tab.

 

“Having worked with Samsung on a number of projects before, we knew they were the perfect partner for this opportunity, said Martin Port CEO at BigChange Apps. “For any company with workers out in the field, it’s imperative they have a great mobility solution in place on a secure and rugged device to keep in regular contact with head office. This ensures a smooth process and avoids any delays that may be passed on to their customers. Our customers love the quality and dependability Samsung’s devices provide and we had no hesitation in recommending to use them with Impra Gas.”

 

Joseph Valente, Founder of Impra Gas commented, “We chose the JobWatch system because we have ambitious plans to grow this company as quickly as possible and needed an outlet that allows a system to manage our workforce efficiently and help us provide an excellent service to our customers. Bringing an established brand such as Samsung on board is really exciting and, having seen the great work BigChange and Samsung have done together in the past, I have no doubt that this technology partnership will help take Impra Gas to the next level…”

Source: Big Change Apps/Samsung