Harman acquires Red Bend Software for $200m
Veteran Israeli company Red Bend Software was sold today for $170 million in cash and shares, and a further $30 million in milestone performance payments by 2017. The buyer is US company Harman International Industries Inc. (NYSE: HAR), which makes vehicle entertainment and information systems. Harman's market cap is $6.7 billion.
Red Bend, whose offices are located in Hod Hasharon, was founded in 1999 by Sharon Peleg and Gadi Gonen. In 2001, two years later, the company changed its business focus, and appointed Yoram Salinger as CEO, a position he retains to this day. The company provides software for remote management of mobile devices, including tablets and smartphones. The company says that its product is currently installed in more than two billion cellular devices.
Red Bend's technology facilitates to remote revision by cellular operators of both software and physical components installed in cellular devices. In addition to updating applications, it is now possible to make revisions in the operating system. These capabilities have helped the company sell its product to a series of major technology companies, including Intel, Sony, Lenovo, Motorola, Samsung, Panasonic, Huawei, LG, TI, ZTE, and others.
In 2010, Red Bend decided to expand by penetrating the auto market, where it helps operate the software and hook cars up to the Internet. The company claims that its customers include over 100 device manufacturers, cellular operators, semiconductor manufacturers, and auto manufacturers.
Salinger today said, "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. 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. These solutions will benefit the entire automotive ecosystem through cost savings, increased security and a seamless customer experience.”
Harman chairman, president, and CEO Dinesh Paliwal today said, "This acquisition of Red Bend, a true pioneer in OTA and virtualization technologies for cyber security, 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. Together with our Symphony Teleca acquisition, Harman now has the essential foundation and deep bench strength for a comprehensive systems and services portfolio. Today marks a huge transformation for Harman and further advancement towards delivering consumers a seamless, connected car and connected lifestyle experience.”
Red Bend chairman and Carmel Ventures general partner Shlomo Dovrat added, "We at Carmel were the first investors in Red Bend, and we're proud of the company for growing and becoming a world leader in remote software management and revision. The company has proved able to adapt its products and strategy to the giant market of revision and management of vehicle software."