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NYSE-listed infotainment company HARMAN International Industries has agreed to acquire Symphony Teleca, a software services company with majority staffers in India, for at least $780 million.
Symphony Teleca, which is controlled by Indian American billionaire Romesh Wadhwani, will strengthen HARMAN’s play in the emerging domain of the internet of things (machines connected to Internet).
Of the 8,000 employees of Symphony Teleca, about 80 per cent are said to be based in India.
HARMAN designs, manufactures and markets audio equipment for automotive, home, theatre and other applications.
“The Internet of Things (IoT) is ushering in a rapid convergence of experiences, content and commerce and advancing technology from digital to connected to intelligent systems. Software is driving this evolution and as result, software solutions and services will be key to HARMAN’s continued success,” said Dinesh Paliwal, Chairman, President and Chief Executive Officer of HARMAN.
IoT, which refers to everyday devices connected to the internet, is rapidly emerging as a third, and likely bigger, wave in the development of cyberspace.
IoT is expected to connect 28 billion devices to the Internet by 2020 through sensors. “The acquisition of Symphony Teleca…gives us immediate scale in software services. With the addition of cloud, mobility and analytics competencies, we will accelerate solutions for the connected car and for a broader set of industries and markets,” he added.
The transaction values Symphony Teleca, better known for supplying software services to the mobile communications industry, at over twice its 2014 revenue of $370 million.
“Symphony has solid intellectual property when it comes to censors, cloud, analytics and other technology areas. I would say that HARMAN got a good asset for a cheap price,” said Sanchit Vir Gogia, founder CEO at advisory firm Greyhound Research.
Alok Shende, Founder and Principal Analyst of Ascentius Consulting, says that Symphony Teleca has the advantage of being a niche player with strong domain capabilities. “The company is not a smaller version of a larger IT services firm as they have refrained from being ‘everything to everybody’. From HARMAN’S point of view, the valuation is their cost of entry into the enterprise space,” added Shende.
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