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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