Viper Holdings, parent of Sound United which controls a stable of upper- mid to high-end home audio brands including Denon, Marantz, B&W and Polk Audio, announced this week a definitive agreement to be acquired by medical technology resource Masimo Corporation.

The strategy behind the reported $1.025 billion deal isn’t expected to be fully explained in detail by Masimo officials later this year. But initial news of the plan sent Masimo stock prices into free fall before starting to rebound Friday.

Masimo is a global medical technology company that specializes in the development, manufacturing and marketing of noninvasive monitoring technologies for hospitals and consumers.

The transaction, which is expected to close near the middle of 2022, is subject to the receipt of regulatory approvals and other customary closing conditions, Sound United said.

Analysts following Masimo have said they believe Masimo is interested in Sound United’s consumer product expertise, particularly from the wearables angle, where personal audio devices like earbuds and headsets could be integrated with Masimo’s health monitoring solutions.

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Sound United offers some of the largest brands in the home audio space including Bowers & Wilkins, Denon, Polk Audio, Marantz, Definitive Technology, Classé, and Boston Acoustics. But home audio products suffer from notoriously weak margins and rapidly evolving technology platforms.

Oh the other hand, Sound United’s brands have significant advantages in global distribution across online, retail and custom integration channels, where Masimo’s personal medical monitoring solutions could benefit, the companies said.

In addition to speakers, earphones and home theater components, Sound United brands leverage a popular cloud-connected wireless home music network ecosystem in HEOS. Masimo will be able to leverage a cross-brand workforce of advanced R&D engineers adept at developing precision high-fidelity systems engineered with deep understanding of the human auditory system.

“I have long been a fan (and proud owner) of Sound United’s iconic brands and am honored to steward them through the next generation of technological evolution,” stated Masimo Founder, Chair & CEO Joe Kiani in announcing the proposed deal. “Masimo shares Sound United’s commitment to providing innovative, best-in-class products and experiences, with a relentless focus on improving the consumer experience.”

“We’re excited about this transaction and see significant potential in combining our expertise in consumer electronics and audio engineering with Masimo’s strengths in healthcare and monitoring,” said Kevin Duffy, CEO of Sound United. “With our track record of industry-first innovation, best-in-class products, and a global distribution network, we are the ideal partner for Masimo to transform the consumer healthcare experience. I look forward to working with the Masimo team to enrich the lives of consumers.”

Sound United is a portfolio company of Boston-based private equity firm Charlesbank Capital Partners, LLC.

Under the plan, Duffy is to continue leading Sound United, and will report to Masimo Chairman and Chief Executive Officer, Joe Kiani.

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By Greg Tarr

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