My First Thoughts on the Samsung/Harman Deal

hcat_small-1116First off, for the sake of the 8,000 or so employees of Harman, I HOPE this is a good deal. The history of mergers and buyouts in AV isn’t good. Sure, there have been some that have done well (aka Milestone), but most big one’s have failed miserably (aka: InFocus buying Proxima and the first time AMX was sold).

I’ve spent the better part of the morning reading and re-reading the press release issued by Samsung about their $112 per share (cash deal) to buy Harman — an $8 Billion deal. And, maybe I am being picky, but one of the only companies NOT mentioned in the release was AMX. They mentioned nearly every other Harman entity individually but they left AMX out. (However, they did mention AMX in their webinar this morning — not by name, but in an image, here, in the PowerPoint slides.)


Was this intentional or was it an accident of the likely consumer-driven PR announcement?

Well, one other thing that’s telling to me — in the press release where they talk about who is going to run the company, it says, “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.”

Note the last three words: “and professional audio brands.”

Did they write this intentionally? Did they intentionally not but “and control” or “and video,” or did the consumer-facing PR team not know that AMX is NOT an audio company? Or, was this intentional? Are they planning to spin-off AMX as a separate company or even sell it?

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The part of the press release that talks about connectivity, and the buzzword of the day IoT (Internet of Things), specifically talks about the connected “automotive market.” Nothing about AMX or its control platform.

I am not saying I am right or wrong, but it’s interesting and worth considering.

As I said at the beginning of this, for the sake of the 8,000 or so employees of Harman, I HOPE this is a good deal.

Here’s a PDF sent out by Samsung on the announcement.

Gary Kayye

About Gary Kayye

Gary Kayye, founder of rAVe Publications, is one of the most prominent personalities in the audiovisual industry. He has been a contributor to WIRED magazine and a technical advisor and columnist for Sound & Communications magazine as well as an opinionated columnist for rAVe [Publications] since 2003. In addition to his writing and market analysis, Gary has been a product, marketing and business operations consultant to dozens of AV companies in the U.S. and overseas. Clients have included companies such as Sony, Sharp, Epson, Lutron, InFocus, Sanyo, Mitsubishi, NEC and Philips.   Gary, who has been involved with the audiovisual market for over 20 years, was the recipient of the InfoComm 2003 Educator of the Year Award and the 2007 NSCA Instructor of the Year Award. Over the years, he has donated much of his time as an active volunteer in the AV industry’s trade association and served as chairman of InfoComm’s Professional Education & Training Committee (PETC), chairman of the ICIA Design School Committee and chairman of InfoComm’s Installation School Committee. In addition, he has served on the InfoComm board of governors. He also helped grow the InfoComm Projection Shoot-Out as the premiere AV industry trade show special event serving on the committee from 1991 through 1997, and was instrumental in launching the Shoot-Out in the European market at the Photokina Expo in 1994 and 1996 as well as the Asian market at the 1995 and 1997 INFOCOMM Asia shows.   Prior to founding his own company, Gary was vice president of sales and marketing for AMX Corporation (, a manufacturer specializing in professional AV and residential AV control systems. Prior to AMX, Gary spent nine years at Extron Electronics (, rising to the position of vice president of sales and marketing. Gary earned his bachelor’s degree in journalism in 1987 from the University of North Carolina and is currently Adjunct Faculty at UNC in the School of Journalism teaching a class on how future technologies will affect the future of advertising, PR and marketing.   He is also the founder of Swim for Smiles, a non-profit that raises money for the N.C. Children’s Hospital through swimming and other fitness-related events for kids. You can contact him at

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  • I dont think, that they left out AMX intentionally. They also left out Martin light for example. To me its just, that professional audio is already small enough so they dont even think of control of being anything stand alone.
    Matter of fact is, that AMX is as close as they can get currently with the buzzword (professional) IoT. So, to me it would be quite unclever to spin them off. Maybe there will not be an independent AMX at all within a short time frame as the unit formerly known as AMX will be a inside supplier of software and video for the rest of the Harman brand. Matter of fact this was one of the very reasons Harman did buy AMX some time ago. Much like BSS and DBX are DSP supplier than independent brand.

    • Gary Kayye


      I don’t disagree. I just hope they care about the ProAV market as I can’t imagine someone from Samsung’s Digital Signage group handling MARTIN. They don’t have a commercial AV group.

  • David Riberi

    Whether intentional or not, the failure to mention brands that we hold dear demonstrates to me that they will have no interest in them. Hopefully I’m just paranoid…but only the paranoid survive!

  • Paul Self

    As a publicly held company, they have to be very careful about the language as it may impact stock prices. If done incorrectly, lawsuits become rampant. The guiding principle is materiality. If X, Y, or Z do not have materiality, then do not mention it. The more they say, the bigger the potential problem.

    I suggest that some of the smaller brands may not have been significant on the plan, gross revenue, or the strategic relationship, therefore not of materiality.

    Or, they may be looking at AMX as their IoT platform and have great plans for expanding the division. If so, this would be a longer play that they may not want to talk about at all for competitive reasons. I hope this is the reason.

    More than likely, the PR and legal people probably didn’t understand what AMX does and unintentionally left them out.

    • Gary Kayye

      I agree. In fact, I tend to think they didn’t even focus on the ProAV stuff accidentally as they weren’t part of the purpose given by Samsung when writing the announcement. Acquisition announcements are highly influenced (when written for a public company) by the CFO and other financial people working for the company. So, the marketing people were an after-thought on input.

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  • Costa Lakoumentas

    Although it’s likely way too early to tell, I think you’re right to question the end-game of the Harman acquisition. Professional audio, video and control brands have never done well under ownership by big, publicly-traded companies. In their latest quarter Harman attributed 14% of revenue to “Professional Solutions” while only 8% of the operating income came from the unit. At the same time, “Lifestyle Audio” contributed 32% and 52% respectively.

    Samsung’s key objective may have been the “Connected Car” business as they have stated in the release, but there are also clear synergies between the Lifestyle audio brands and Samsung’s own consumer electronics business. Professional solutions, not so much. It wouldn’t be surprising to see them divest the professional brands either whole or in part to other players more firmly in the pro space.

    • Gary Kayye

      I agree with your assessment. But, Lifestyle is basically JBL consumer. The ProAV parts aren’t part of that. but, I think you are likely aware of that, too.

  • likejiujitsu

    What is amx? I never heard of it

  • Mark

    Gary, I share your same sentiment however I feel it will be much more significant than just AMX. When you acquire a diverse company like Harman, the purchaser is typically after one or two core components (dozens of examples exist in the real world – Apple, Cisco HP, Microsoft) and will either a) carve out other items and prepare them for sale or b) simple close them down.
    In the case of the Samsung acquisition of Harman, I believe the end result will be Samsung carving out the entire Professional AV side of Harman (JBL, AMX/SVSI, AKG, Crown, BSS etc..) and prepare it for sale, then turn it’s laser focus solely on the automotive technology sector. Let’s not forget, probably the largest reason (thank you to corporate greed and shareholders) why this acquisition took place, Harman has $24 Billion worth of deals in their pipeline, How much do you think that Professional AV division has?? Simply put, the ProAV side is probably $23.5 Billion dollars short of that pipeline and with the constant chatter in regards of how weak the Harman product managers, engineers and sales departments actually work together with themselves on the Pro AV side… one would think, maybe it’s time this actually happens!

    • Mark Gadomski

      To clarify, 24 Billion worth of deals within their ‘connected car’ division.

    • Gary Kayye

      I do not agree. I guess the real question is who’s big enough to buy them all?

      • Mark

        Gary, think bigger than AV!! Why does it have to be somebody in AV?
        This could be as simple as an equity firm coming in and completing the transaction. ( H.I.G Capital and AVI-SPL ring a bell???)

  • David Glaubke

    Thanks again, Gary, for your interest in our breaking news this week. We couldn’t be happier with the outcome as it validates the hard work of our 30,000 employees, more than half of whom are engineers and R&D professionals.

    You specifically questioned the importance of AMX and video in this transaction. In fact, we see incredible opportunities to combine Samsung’s leadership in video displays together with AMX products and technologies.

    We believe the assumptions you made in this blog post about the commitment to AMX were not supported by what was announced. We did, in part, highlight complementary capabilities where a convergence of technologies brings growth opportunities to both entities. To that end, AMX was mentioned with other leading HARMAN brands alongside Samsung’s leading core technology that includes its market leadership in display and video. It is misleading to suggest that the lack AMX mentions in the marketing assets of an $8 billion transaction indicates a lack of commitment to a long-term strategy.

    Our customers and stakeholders are already extremely excited about our potential to deliver integrated, large-scale audio, video, lighting, control and switching solutions across all the vertical markets we serve. Needless to say, we couldn’t be more optimistic for what the future holds with our new relationship with Samsung. – David Glaubke, Director of Public Relations, HARMAN Pro Solutions

    • Gary Kayye

      David, Thank you for leaving the comment on the blog.

      I believe your comment was a bit deceptive because I offered the opportunity to interview you prior to writing that blog but you chose to turn that opportunity down. Instead, you choose to shoot holes in it 24 hours later. And, even these new comments are vague. And, to address your comment, above, that. “It is misleading to suggest that the lack AMX mentions in the marketing assets of an $8 billion transaction indicates a lack of commitment to a long-term strategy.” – read the comments left on my blog from others. They speak for themselves (and the market, I believe). However, that said, I did not suggest otherwise, I only pointed out the obvious. It was OBVIOUS.

      Again, I contacted you (BEFORE WRITING THIS) and you declined to comment. So, I wrote what I saw and others observed too. Again, I will ask for an interview with a Harman executive that is actually “in-the-know” – not just a PR voice – to discuss, in more depth, the merger. My 2nd official request.

      I believe our readers deserve to hear the plan or the facts from the top.

      Again, for the second time in 48 hours, I request that we actually have an interview and an opportunity to inform the market. There is no publication in the commercial audiovisual industry that comes close to our reach. We can be very helpful in helping you get your message out because the message that is out there now is AMBIGUOUS. You may believe otherwise but it is a classic case of PR ambiguity.


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  • After some days I still find it interesting, that the purchase price was not that high at all!
    Yes, Samsung offers a significant premium above the then current stock price but lets run some numbers.
    Purchase price (all cash not to forget) is not that much higher than a full year’s worth of turnover OR around 12 times last year earnings. Both multiples are pretty standard.
    Harman does have this serious pipeline of signed contracts north of 24 billion = full 3 year of turnover!
    So I’m asking myself who “forgot” about the long term pipeline and what is its price?
    It is common sense, that having such contracts is worth something but I dont see it reflected in the purchase price at all.

    Long story short: I would have assumed that with all this fantasy of connected cars and such the price to be higher.

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