New York (October 23, 2007)–Harman International announced Monday that it has entered into an agreement with affiliates of KKR and GSCP, relating to the parties’ previously announced Merger Agreement.
The terms of the new agreement include the following:
• KKR and GSCP will purchase $400 million of 1.25 percent senior notes convertible under certain circumstances into Harman common stock, convertible at a price of $104 per share. KKR and GSCP have agreed to not sell or hedge their position for at least one year.
• The parties have agreed to terminate their Merger Agreement dated April 26 without litigation or payment of a termination fee.
The company also announced that Brian F. Carroll, member of KKR, will join Harman’s Board of Directors. The company will use the proceeds from the KKR/GSCP investment to repurchase Harman common stock through an accelerated share repurchase program.
Dr. Sidney Harman, executive chairman of Harman, noted, “We are pleased to have reached an understanding with KKR and GSCP. Although we do not agree with the reasons for cancellation of the original merger agreement, we view this $400 million investment as a vote of confidence in our business and its prospects for continued growth. Our company benefits from excellent customer relationships built on world-class products, brands and technology, and we are well positioned to capitalize on market opportunities in the automotive, consumer and professional sectors.”