Over the past 50 years, Harman International (NYSE: HAR) has built a solid business in stereo and audio equipment. It's so good that KKR and GS Capital Partners have agreed to buy out the company for a cool $8 billion.Harmon increased sales by 10% to $882.8 million in Q3 and earnings increased from $64 million, or $0.94 per share to $71 million, or $1.07 per share. The company has a variety of brands like JBL and Infinity and has major contracts with auto companies like DaimlerChrylser (NYSE: DCX).
Interestingly enough, Harmon shareholders have the opportunity to convert some of their shares into the private entity (there are 8.3 million shares available for this option). This is something that is fairly rare in the buyout world.
The deal also has a go-shop provision that allows Harmon to seek other bids.
In fact, the Street thinks the bid will increase. Harmon's stock is currently trading at $122.49, which is above the $120 buyout offer.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
