HARMAN to Acquire Red Bend for $200 Million

23 January, 2015

“This acquisition of Red Bend adds a critical component to our automotive systems and services portfolio,” said Dinesh C. Paliwal, Chairman, President, and CEO of HARMAN

“This acquisition of Red Bend adds a critical component to our automotive systems and services portfolio,” said Dinesh C. Paliwal, Chairman, President, and CEO of HARMAN

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HARMAN International Industries, announced the acquisition of Israeli-based Red Bend Software, a leading provider of software management technology for connected devices, and over-the-air (OTA) software and firmware upgrading services. HARMAN will accelerate Red Bend’s growth in the automotive space and will position Red Bend software as the de facto standard for OTA software services for mobile devices and automotive applications.

The transaction is valued at $170 million, including approximately $99 million in stock and $71 million in cash. 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.

Red Bend is the world’s leading provider of the most advanced OTA solutions, serving top handset manufacturers and mobile carriers with more than 2 billion Red Bend-enabled devices in the market globally. Sophisticated software systems like Red Bend are the cornerstone of a steadily increasing number of integrated and interoperating devices, and managing updates for firmware, middleware, third party apps, and other services.

“This acquisition of Red Bend 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 Dinesh C. Paliwal, Chairman, President, and CEO of HARMAN.

“With over 15 years of success in delivering world-class over-the-air update solutions to the telecom and mobile markets, we are pleased to bring our proven track record to HARMAN,” said Yoram Salinger, President and CEO of Red Bend. “By joining forces with HARMAN, we will accelerate our growth in expanding markets such as the connected car while also continuing to support billions of mobile devices. Beyond mobile, Red Bend and HARMAN will implement OTA software management to enhance infotainment and embedded system performance as well as other in-car ECU-based systems.”

Red Bend’s software management solutions and hypervisor-based virtualization technologies for cyber security are already widely adopted in mobile devices and ideally suited to meet the rising demands of the connected car. By 2020, it is expected that more than 90 percent of vehicles on the road will be connected (Frost and Sullivan). Importantly, Red Bend solutions also serve as critical prerequisites for autonomous driving.

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Posted in: Business , Deals and Investments , Mobile , News , Software and IT

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