Harman Closes AMX LLC Buy, Boosts Portfolio - Analyst Blog

Harman International Industries, Inc HAR, the leading infotainment and audio group, recently completed the acquisition of AMX LLC from The Duchossois Group for a sum of $365.0 million.

Founded in 1982 and headquartered in Richardson, Texas, AMX develops hardware and proprietary software solutions that simplify the way people interact with technology. AMX employs more than 600 people across its operations in 19 locations worldwide.

Harman believes that with the addition of AMX to its portfolio, the company will be able to provide complete audio, video, lighting and automation solutions to its customers around the world. This acquisition will help in establishing Harman as a leading supplier of turnkey AV solutions.

Per Gartner, in-vehicle infotainment systems represent around $3.0 billion semiconductor market opportunity by 2017. Hence, being the leading infotainment group, Harman's near-term prospects are bright.

We believe that Harman's new manufacturing capacities, growing product pipeline, solid patent portfolio, new awards as well as product launches will boost its top line and profitability in 2014 and beyond.

Moreover, recently car makers such as BMW, Daimler and VW Group selected Harman's technology in their car lines. Also, Harman won customer awards from Toyota to supply infotainment solutions across its car models in Europe. All these will act as major growth divers for Harman going forward.

Additionally, we believe that recently announced partnerships with Softbank, Sprint Corp., Trikomsel and Brightstar will expand Harman's market share, going forward.

Meanwhile, Harman continues to expand due to its partnerships with the likes of Apple AAPL and Google (GOOGL). However, intensifying competition from Sony Corp. SNE remains a concern.

Currently, Harman carries a Zacks Rank #3 (Hold).