Harman Int'l Industries To Buy Symphony Teleca, Red Bend Software - Quick Facts

(RTTNews) - HARMAN International Industries, Inc. (HAR) announced it has signed an agreement with Symphony Technology Group to acquire Symphony Teleca, a privately-held global software services company.

Under the agreement, HARMAN will purchase Symphony Teleca for a base purchase price of $780 million. In addition, the selling stockholders are eligible for a cash earn-out based on a calendar 2015 revenue target. Approximately $548 million will be paid at close - $382 million in cash and $166 million in HARMAN stock. The number of HARMAN shares issued will be based on the volume weighted average trading price 60 days prior to January 21.

The remainder of the base purchase price as well as any additional earn-outs will be paid in cash in the first quarter of calendar 2016. The cash and stock transaction is expected to be accretive to HARMAN's adjusted earnings in fiscal year 2016, excluding purchase accounting charges, transaction costs, integration costs and other special items. The transaction is subject to customer closing adjustments.

Based in Mountain View, CA, Symphony Teleca provides software engineering and integration services that help businesses rapidly design and develop products and technologies at the convergence of device, sensors, cloud and data.

With the acquisition of Symphony Teleca, HARMAN will add a fourth division to its three primary businesses: Infotainment, Lifestyle and Professional.

The transaction is subject to customary closing conditions and regulatory approvals and is expected to be completed by the end of HARMAN's 2015 fiscal year.

Symphony Teleca has more than 8,000 employees, predominantly software engineers and designers, and the company generated revenues of approximately $370 million in calendar year 2014.

In a separate press release, HARMAN International Industries announced the acquisition of Israeli-based Red Bend Software, a provider of software management technology for connected devices, and over-the-air (OTA) software and firmware upgrading services. The transaction is valued at $170 million, including approximately $99 million in stock and $71 million in cash.

The number of HARMAN shares issued will be based on the volume weighted average trading price 60 days prior to January 21. Under the agreement, the selling stockholders of Red Bend are eligible for a cash earn-out of up to $30 million in the first quarter of calendar year 2017 based on the achievement of certain performance milestones.

The Red Bend acquisition is subject to regulatory approvals and customary closing adjustments. It is expected to close in third quarter of HARMAN's 2015 fiscal year.

Upon close of the transaction, Red Bend will operate within HARMAN as an independent unit led by its existing management team, while benefiting from HARMAN's scale, resources, and deep automotive domain experience.