By Angela Chen 

Audio-equipment maker Harman International Industries Inc. has agreed to buy two car-software companies for $950 million in cash and stock, in moves to expand its presence in the market for the "connected car."

Connecticut-based Harman creates and markets audio equipment, primarily for the automotive market. It will buy Mountain View's Symphony Teleca, which provides integration services, for $780 million and Israel's Red Bend Software, which specializes in software for connected devices, for $170 million.

Of the $780 million for Teleca, $382 million will be in cash. For Red Bend, $71 million will be in cash. Selling stockholders of Red Bend are eligible for a cash earn-out of up to $30 million if certain performance milestones are achieved.

Privately held Symphony Teleca creates software services for mobile and telecom companies, while Red Bend manufactures software-management technology for connected devices. Symphony, in particular, will bring experience with technology partners due to its work with companies such as Google Inc. and Intel Corp. Harman will embed Red Bend's "over the air" technology in its car systems.

Both companies are meant to help Harman keep up with the so-called "Internet of Things," or the interconnection of many different types of software and equipment in a given environment, as applied to cars.

The acquisitions "add a critical component to our automotive systems and services portfolio," said Harman Chief Executive Dinesh C. Paliwal. By 2020, more than 90% of cars are expected to be connected, the company said.

The acquisition of Symphony Teleca means that Harman will add a new division, focusing on cloud services and mobile, to its existing primary businesses of infotainment, lifestyle and professional. Symphony Teleca CEO Sanjay Dhawan will join Harman to lead this new division.

Both deals are expected to close in late 2015.

Shares of Harman were up about 0.33% in early morning trading.

Write to Angela Chen at angela.chen@dowjones.com

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