Harman Buys Symphony Teleca For At Least $780M And Red Bend For $170M

Harman, one of the world's largest audio companies with brands like JBL, Harman Kardon, Infinity and many others under its wing, is now investing big in the technology and networking that goes into delivering data wirelessly. Today, the company announced two acquisitions that collectively put a dent of at least $1 billion in its coffers, but also position it to move aggressively into over-the-air service delivery to wireless devices like smartphones, tablets, cars and the connected home. The company is acquiring Symphony Teleca, a Mountain View-based specialist in software and services for cloud-based and wireless businesses, including around Internet-of-things applications. And it is also buying Red Bend Software, an Israel-based developer of over-the-air upgrading and other software management services. Symphony Teleca, up to now a privately-held company with 8,000 employees, "predominantly software engineers and designers," had sales of $370 million in 2014. It has 300 active customers including Google, Microsoft, Intel, Adobe, Jaguar Land Rover, Verizon, Comcast, Sirius XM and Tesco. As part of the deal, Symphony Teleca will be at the center of a fourth division at the company, Harman says, alongside existing business lines in infotainment, lifestyle and professional services. It will focus on areas like the Internet of Things and the rush for a new market for connected devices in homes and offices, alongside a lot of other business areas covering many different verticals and services like telecom, automotive, healthcare, consumer electronics, retail and media. "The Internet of Things (IoT) is ushering in a rapid convergence of experiences, content and commerce and advancing technology from digital to connected to intelligent systems. Software is driving this evolution and as a result, software solutions and services will be key to HARMAN’s continued success,” said Dinesh C. Paliwal, Harman Chairman, President and Chief Executive Officer, in a statement. “The acquisition of Symphony Teleca is a transformative step for HARMAN that gives us immediate scale in software services. With the addition of cloud, mobility and analytics competencies, we will accelerate solutions for the connected car and for a broader set of industries and markets. We look forward to welcoming the Symphony Teleca team to HARMAN and working closely with them to fulfill our customers’ desires for building a seamless, safe and secure connected lifestyle.” Harman says it will buy Symphony Teleca for a base purchase price of $780 million, alongside an unspecified cash earn-out based on a 2015 revenue target. At close, $548 million will be paid out, $382 million in cash and $166 million in Harman stock. Red Bend, meanwhile, is valued at $170 million, $99 million in stock and $71 million in cash. The sellers are also eligible for a further $30 million in the first quarter of calendar year 2017 "based on the achievement of certain performance milestones." Red Bend works with a number of handset manufacturers and carriers for OTA services such as app and operating system and firmware updates, with some 2 billion devices managed with its software today worldwide. “This acquisition of Red Bend, a true pioneer in OTA and virtualization technologies for cyber security, adds a critical component to our automotive systems and services portfolio that will essentially future proof software in cars, ultimately making them safer, smarter and more efficient,” said Paliwal in a statement. “Together with our Symphony Teleca acquisition, HARMAN now has the essential foundation and deep bench strength for a comprehensive systems and services portfolio. Today marks a huge transformation for HARMAN and further advancement towards delivering consumers a seamless, connected car and connected lifestyle experience.” Symphony Teleca had no investments disclosed on Crunchbase, while Red Bend had raised $25 million from investors that included Greylock, Pitango, Carmel Ventures and Infinity.
Ingrid Lunden

Ingrid Lunden is a Writer at Gigabuzz, focused on covering early-stage startups, especially those with a technology focus and great perks.

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