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Masimo founder Joe Kiani resigns as CEO following ouster from board (Due to acquisition of Sound United)

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Sept 25 (Reuters) - Masimo (MASI.O), opens new tab said on Wednesday founder Joe Kiani has decided to step down as the medical device maker's CEO, days after shareholders voted to remove him from the company's board following a bitter proxy battle with activist hedge fund Politan Capital Management.

The company named veteran healthcare executive, Michelle Brennan, as interim chief. Brennan was nominated by Politan for Masimo's board last year, along with the hedge fund's founder Quentin Koffey. Both were subsequently elected by shareholders.

The stock has fallen more than 40% since Feb. 15, 2022, when Masimo announced the $1-billion acquisition of audio products maker Sound United. The deal was a key factor behind Politan's activism.
Masimo also said it has engaged Centerview Partners and Morgan Stanley as financial advisors and Sullivan & Cromwell as legal advisor as it continues to evaluate alternatives for its consumer business, which includes Sound United and health tracking watches.

The company has received offers of up to $950 million for the business.
 
Playing armchair analyst, Sonos was the most likely partner but Sonos’s own struggles probably threw a wrench in that plan.

Private equity could do it. McIntosh/Sonus Faber did great. Audio Research not so much. Denon and Marantz are also products of private investors.

The other wildcard would be someone like Best Buy or Target.
 
Wow, I hadn't really followed this story, but what a dumb acquisition this looks to have been... they wanted to accelerate distribution of consumer medical devices by acquiring expertise from a bunch of audio brands, is that it?

On one hand, this makes a certain amount of sense, these audio brands have very wide distribution ... in certain consumer outlets, but only moderate overlap with medical there, and none of the same buyers. Like I know CVS and Walgreens don't sell Polk or B&W... :facepalm:

On the other hand, why not just buy an electronics distributor? Say, one that already does wearables or health stuff?

You'd get access to all of the retailers, sales expertise, and buyers - without paying a dickload of money for premium brands that have no relevance to the core business.

Are CEOs really as dumb as they look?
 
Isn't the (former) CEO Joe Kiana a well-known audio enthusiast? I would guess it likely that his hobby interest in audio colored/distorted his thinking and led him to believe buying Sound United was a, ahem, sound business decision, when actually it was more a fun purchase for him with very limited business rationale.

What surprises me most is that the board didn't stop it in the first place.
 
In hindsight, I have made a purchase of audio gear that was ill-advised, but nothing on the magnitude of this.....

Imagine the landscape for AV receivers today if the acquisition of Onkyo/Pioneer in 2019 by Sound United had been completed.
 
JoetheLion said:
Apparently there is no buyer for Denon/Marantz etc:

Former Sound United Business Could Be “Discontinued” Next Year After Falling Revenues, No Buyer and Losses Claims New Director – channelnews

www.channelnews.com.au www.channelnews.com.au
Click to expand...

No buyer yet

The company or companies that build gear for Sound United may be incentivized to find a partner who can sell the gear as Sharp did in taking a 25 percent stake in a joint venture with Voxx International to acquire the assets of Onkyo.
 
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