Harman International said it "thinks well" of the deal it announced in late April to sell the company to Goldman Sachs and Kohlberg Kravis Roberts & Co. (KKR) for just shy of $8 billion.
Harman CEO Sidney Harman, who owns 5 percent of the company's outstanding shares, will remain company chairman. He admitted to analysts during a conference call after the company reported its third quarter earnings that part of the reason for the sale was that he is approaching the age of 89.
He said KKR and Goldman Sachs are "superbly funded, and I think very well of the personnel in this organization; I think very well of their business acuteness. I think very well of the network that becomes available to us … and I think very well of the fact that Henry Kravis, in particular, will become a member of this board."
Harman added, "Beyond that … I'm a vigorous guy for a man three months removed from his 89th birthday. I consider it an obligation to find … a safe supportive harbor for the company and it employees, and customers and suppliers."
Harman said the company has chosen a new CEO and is in the process of negotiating terms of employment. It will identify the person as soon as negotiations are complete, he said.
The company will pay $120 cash for each Harman share, but shareholders will have the right to elect to retain a portion of their Harman stock up to a maximum of 8.3 million shares in total.
The company also has the right to consider other offers during a 50-day period but would pay the KKR Goldman group a $75 million break-up fee, in the event it chose an alternative bid.
Harman reported record third-quarter results for the period ending March 31. Sales for the quarter rose 10 percent to $882.8 million compared with $801.5 million for the period a year ago. Net income for the quarter increased 11 percent to $71.0 million. The company reported all key sectors increased sales by 10 percent including automotive sales ($624.9 million), consumer sales ($118 million) and professional sales ($139.9 million).