 THE LATEST BUZZ
Harman Bought for $8 billion
Harman International Industries, known for many MI brands including JBL, AKG, and Lexicon, agreed to be taken private for $8 billion, or $120 a share, by Kohlberg Kravis Roberts & Co. (KKR) and GS Capital Partners (GSCP), Goldman Sachs’ private equity division. Harman’s stock traded much higher than $120 on the day the deal was announced, April 26. That’s because under the agreement, Harman can solicit other bids until June 15, with some investors expecting another offer to surface.
Shareowners that own Harman stock could either receive cash, or exchange their shares for ones in a new corporation to be formed by KKR and GSCP. That new corporation will not list on a stock exchange, but will register with the U.S. Securities and Exchange Commission. The deal is expected to close in the third quarter of this year. The company will continue to be called Harman International Industries and Dr. Sidney Harman will remain executive chairman.
“We are pleased to reach an agreement with KKR and GSCP that is in the best interest of our stockholders, presenting them with excellent value for their shares and the opportunity to participate in Harman’s future growth,” Dr. Harman told Business Wire. “KKR and GSCP are two of the world’s leading private equity investors and our board of directors strongly believes this transaction will create attractive long-term opportunities for our employees, customers, and business partners. Together, we will continue to execute our strategic plan, capitalize on new opportunities, and build on our history of product innovation and service excellence.”
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Grammy Gold
Some of MI’s biggest microphone companies were on hand to help some of music’s biggest stars shine at this year’s Grammy Awards. Shure made an appearance in the hands of “Best New Artist” winner Carrie Underwood, who used the UHF-R Wireless. The Dixie Chicks made use of the SM58 UHF-R Wireless and Christina Aguilera had her Beta 87 UHF-R Wireless in hand. Audio-Technica products also took center stage as Justin Timberlake performed with Robyn Troup, winner of the “My GRAMMY Moment” contest. Timberlake used a custom AEW-T4100 microphone/ transmitter, while Troup used an AEW-T5400 microphone/transmitter. Finally, many of the night’s performers used Sennheiser products. Among them were Shakira, who used a SKM 3072 wireless; Beyonce with her SKM 5200 wireless handheld mic with Neumann KK 105-S capsule; and the reunited Police, who opened the show with the help of the new Sennheiser HSP4-EW headset. |
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Motley Fool: Expenses, Not Margins Hurt GC
Higher corporate overhead expenses, not profits margins, hurt Guitar Center in the fourth quarter of 2006, theorized Motley Fool writer Rick Aristotle Munarriz. As mentioned in last month’s issue, GC reported a quarterly loss in its quarter ending Dec. 31 due to one-time items regarding Music & Arts.
However, Munarriz called the loss “forgivable.” “Why did earnings dip, despite the top-line gain?” he asked. “It wasn’t the markups. They proved to be generous, as Guitar Center posted improved gross margins at all three of its divisions…No, what forced Guitar Center to skip a beat were higher corporate expenses.”
He identified those expenses as, “Relocating its Musician’s Friend warehouse, upgrading its computer systems, and spending to fix its recent Woodwind & Brasswind acquisition.”
The writer expects those expenses to “weigh heavily” on GC for the rest of the year.
Zildjian Expands
The Avedis Zildjian Company broke ground on an $11 million plant expansion set to be completed in spring 2008. Zildjian’s Norwell, Mass., headquarters will be 15,000 sq. ft. bigger and will have 50 percent more production capacity. “Our production needs have increased by over 45 percent over the past four years. At the same time, we knew that our Norwell workforce was the key element that needed to be retained in order to continue this success,” said CEO Craigie Zildjian. In addition, the company installed a “Wenger” sound booth for cymbal testing in the Kerope Zildjian Memorial Orchestral Cymbal Vault, as well as a new Drum Set Artist Vault.
Lennon Bus Names Exclusive Guitar Sponsor
Godin Guitars was named the official exclusive guitar sponsor of the John Lennon Educational Tour Bus and John Lennon Songwriting Contest. The company will provide prizes for radio and Internet promotions for the Warped Tour and other tours with which the bus is involved. The bus will feature select Godin electric and semiacoustic models, along with guitars featuring 13-pin technology, and the Seagull line of acoustic guitars. Also, Grand Prize Winners of the songwriting contest will receive Godin guitars.
Audio Agent LLC Open for Business
Five industry veterans have come together to create an integrated sales and marketing agency called Audio Agent LLC. The Seattle-based company also has offices in Los Angeles and New York, and deals with a variety of clients in the audio and MI fields—among them, LOUD Technologies/Mackie, Fender, Symetrix, and AMS Neve. The company is made up of Dave Christenson, who has held senior sales positions at Mackie, SSL, and Sony; Erik Hanson, former creative director for Mackie, Ampeg, Alvarez, and Roland; John Hart, the former president of AMS Neve Inc.; Jeremy Stappard, who was LOUD’s Web developer and art director; and Justin Marx, former president of Cal AV Trading Company.
Shure Updates Dealer Site
Shure added a new function to its dealer Web site that allows dealers to enter their own product orders online. Both standard and rush orders are accepted, and each orderer receives an online confirmation after the order is approved by Shure’s credit department. In order to access the new site and its functionality, dealers need to fill out and return the “Web Shop Application Form” that was e-mailed to them.
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