Filed by Harman International Industries, Incorporated.
Pursuant to Rule 425 under the Securities Act of
1933 and Deemed Filed under Rule 14a-12 of the
Securities Exchange Act of 1934
Pursuant to Rule 425 under the Securities Act of
1933 and Deemed Filed under Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Harman International Industries, Incorporated.
Commission File No. 001-09764
Commission File No. 001-09764
April 26, 2007
To: Harman Employees
I attach a copy of the press release which announces the merger of Harman International into a new
company which will be financed by the investment firm Kohlberg Kravis Roberts. The new company
will carry the Harman International name. I will be its Executive Chairman and a substantial
investor.
Although the new company will have a public shareholder dimension, it will operate, in most
respects, as a private company. At this time in our history, I believe that will provide an
environment for serious growth and development.
You should also know that we have identified a superbly qualified person to become our new CEO. I
have been performing that function since Bernie Girod’s retirement and
I have been absolutely determined that the new President/CEO must be “world class.”
I hope to announce that appointment in the next few weeks.
Although I believe that this new construct enhances the future development of the company and adds
to the security for employees, I do not expect that you will see any consequential difference in
day-to-day operations. As I have said, I will continue as Chairman, I will soon announce a new
President/CEO, Erich Geiger will continue as Chief Technology Officer and Kevin Brown will continue
as Chief Financial Officer. I expect incentive and employee support programs will continue in their current form or possibly
with some enhancement.
The legal and technical activities required in such a transaction are both complex and lengthy. I
will keep you informed as it moves to conclusion.
Sincerely,
Sidney Harman
Executive Chairman
Executive Chairman
SH/khr
Enclosures (2)
REQUIRED LEGAL DISCLOSURES
Additional Information and Where To Find It
The parties to the acquisition agreement intend to file a registration statement that will include
a joint proxy statement/prospectus and other relevant documents in connection with the proposed
transaction. HARMAN INVESTORS ARE URGED TO READ THESE DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors may obtain a
free copy of the joint proxy statement/prospectus (when it becomes available) and other filings
containing information about Harman and the merger, when available, from the SEC at the SEC’s
website at http://www.sec.gov. In addition, copies of the proxy statement/prospectus and other
filings containing information about the Company and the merger can be obtained, when available,
without charge, by directing a request to Harman International Industries, Incorporated: Attention:
Investor Relations, 1101 Pennsylvania Avenue, NW, Suite 1010, Washington, DC 20004, or by telephone
at (202) 393-1101 or on Harman’s website, http://www.harman.com.
Interests of Participants
The Company and its directors and executive officers and certain other members of management and
employees may be deemed to be participants in the solicitation of proxies from Harman’s
stockholders in favor of the proposed transaction. Additional information regarding the interests
of potential participants in the proxy solicitation will be included in the definitive proxy
statement/prospectus and other relevant documents that Harman intends to file with the SEC in
connection with the scheduled special meeting of its stockholders.
Harman International
PRESS RELEASE
PRESS RELEASE
April 26, 2007
|
FOR IMMEDIATE RELEASE | |
| Contact: Robert C. Ryan | ||
| Vice President — Treasurer | ||
| Harman International Industries, Incorporated | ||
| 202-393-1101 |
HARMAN INTERNATIONAL INDUSTRIES TO BE ACQUIRED BY KKR AND GS CAPITAL PARTNERS
Harman Stockholders Can Elect to Receive $120 Per Share In Cash
or Shares in Post-Transaction Company
or Shares in Post-Transaction Company
Transaction Valued at Approximately $8 Billion
WASHINGTON, April 26, 2007 — Harman International Industries, Inc. (NYSE: HAR) today announced
that it has entered into an agreement to be acquired by affiliates of Kohlberg Kravis Roberts & Co.
L.P. (“KKR”) and GS Capital Partners (“GSCP”) in a transaction valued at approximately $8 billion.
The transaction was unanimously approved by the Harman Board of Directors, following the
recommendation of a Special Committee of independent directors. KKR initiated discussions with
Harman and structured the transaction so that current Harman stockholders have the opportunity to
participate in the future upside potential of the enterprise. The company will continue to be
named Harman International Industries and Dr. Sidney Harman, Founder and Executive Chairman, will
remain Executive Chairman.
Dr. Harman stated: “We are pleased to reach an agreement with KKR and GSCP that is in the best
interest of our stockholders, presenting them with excellent value for their shares and the
opportunity to participate in Harman’s future growth. KKR and GSCP are two of the world’s leading
private equity investors and our Board of Directors strongly believes that this transaction will
create attractive long-term opportunities for our employees, customers and business partners.
Together, we will continue to execute our strategic plan, capitalize on new opportunities, and
build on our history of product innovation and service excellence.”
Henry R. Kravis, Co-Founding Member of KKR, said, “Harman is one of the world’s outstanding
providers of audio equipment and infotainment systems with an unparalleled portfolio of legendary
brands and strong customer relationships. Since founding Harman more than 50 years ago, Dr. Sidney
Harman has brought exceptional vision to the company and we are proud to work with him and the
management team to continue building the value of their company.”
Under the terms of the agreement, Harman stockholders will be entitled to receive $120 in cash for
each share of Harman common stock they hold. As an alternative to receiving the cash consideration, Harman’s stockholders will be offered the opportunity to elect,
on a purely voluntary basis, to exchange some or all of their shares of Harman stock for shares in
the new corporation incorporated by KKR and GSCP in order to acquire Harman. The total amount of
Harman shares that may elect to receive shares in the post-transaction corporation is approximately
8.3 million, which would represent $1.0 billion (at the $120 per share transaction value) and an
approximate 27% equity stake in Harman following the transaction. If elections for
post-transaction shares exceed the $1.0 billion cap, post-transaction shares will be allocated to
electing stockholders on a pro-rated basis, and the remaining Harman shares will be exchanged for
cash. The election process will be fully detailed in the proxy statement/prospectus that will be
mailed to Harman stockholders.
Dr. Harman, who owns approximately 5% of the outstanding common stock of Harman, will participate
in the same election process available to all stockholders. He has committed that he will elect to
exchange half of his current holdings for post-transaction shares, subject to the same pro ration
that applies to all stockholders as described above.
Under the agreement, Harman may solicit proposals for alternative transactions from third parties
for a 50-day period ending on June 15, 2007. Harman’s Board of Directors will work with its
independent advisors to solicit proposals during this period. There can be no assurances that this
solicitation will result in an alternative transaction. Harman does not intend to disclose
developments with respect to this solicitation process unless and until its Board of Directors has
made a decision regarding any alternative proposals.
Completion of the transaction, which is expected to occur in the third quarter of 2007, is subject
to the approval of Harman stockholders, customary closing conditions and regulatory approvals. The
Board of Directors of Harman has unanimously recommended that Harman stockholders vote in favor of
the transaction.
The stock of the new corporation issued to current shareholders in exchange for their existing
shares will be registered with the U.S. Securities and Exchange Commission. The shares will not be
listed on any exchange, although the buyers expect that there will be market makers in the stock.
Bank of America Securities LLC, Credit Suisse, Goldman Sachs and Lehman Brothers have committed
debt financing for the transaction, subject to customary terms and conditions, and are also acting
as financial advisors to KKR and GSCP. Simpson Thacher & Bartlett LLP is acting as legal advisor
to KKR and GSCP. Bear, Stearns & Co. Inc. is acting as Harman’s financial advisor. Wachtell,
Lipton, Rosen & Katz is providing legal counsel to the Special Committee of the Harman Board of
Directors, and Jones Day is providing legal counsel to Harman.
About Harman International
Harman International Industries, Incorporated (www.harman.com) is a leading manufacturer of
high-quality, high fidelity audio products and electronic systems for the automotive, consumer and
professional markets. Its brands include Harman Kardon®, JBL®, Mark Levinson® and Infinity®, among
others. The company maintains a strong presence in the Americas, Europe and Asia, employing over 10,500 people. The Company’s stock is
traded on the New York Stock Exchange under the Symbol: HAR.
About KKR
Kohlberg Kravis Roberts & Co. (KKR) is one of the world’s oldest and most experienced private
equity firms specializing in management buyouts. Founded in 1976, it has offices in New York, Menlo
Park, London, Paris, Hong Kong and Tokyo. Throughout its history, KKR has brought a long-term
investment approach to its portfolio companies, focusing on working in partnership with management
teams and investing for future competitiveness and growth. Since its founding, KKR has completed
more than 150 transactions with an aggregate value of over US$279 billion. (www.kkr.com).
About GS Capital Partners
Founded in 1869, Goldman Sachs is one of the oldest and largest investment banking firms. Goldman
Sachs is also a global leader in private corporate equity and mezzanine investing. Established in
1992, the GS Capital Partners family of funds is part of the firm’s Principal Investment Area in
the Merchant Banking Division. Goldman Sachs’ Principal Investment Area has formed 13 investment
vehicles aggregating $56 billion of capital raised. GS Capital Partners VI is the current primary
investment vehicle for Goldman Sachs to make large, privately negotiated equity investments.
Additional Information and Where To Find It
The parties to the merger agreement intend to file a registration statement that will include a
proxy statement/prospectus and other relevant documents in connection with the proposed
transaction. HARMAN INVESTORS ARE URGED TO READ THESE DOCUMENTS WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors may
obtain a free copy of the proxy statement/prospectus (when it becomes available) and other filings
containing information about Harman and the merger, when available, from the SEC at the SEC’s web
site at http://www.sec.gov. In addition, copies of the proxy statement/prospectus and other
filings containing information about the Company and the merger can be obtained, when available,
without charge, by directing a request to Harman International Industries, Incorporated; Attention:
Investor Relations, 1101 Pennsylvania Ave., N.W., Suite 1010, Washington, DC 20004, or by telephone
at (202) 393-1101 or on Harman’s website, www.harman.com.
Forward-Looking Information
This communication may contain “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Those forward-looking statements
include all statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and
other factors may cause actual results to differ materially from those expressed in any
forward-looking statements.
These factors include, but are not limited to, (1) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger agreement; (2) the outcome of
any legal proceedings that may be instituted against Harman and others following the announcement of the merger agreement; (3) the inability to complete the merger due to
the failure to obtain shareholder approval or the failure to satisfy other conditions to the
merger; (4) the failure to obtain the necessary financing arrangements set forth in the commitment
letter received in connection with the merger; (5) risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in employee retention as a result of
the merger; and (6) other factors described in Harman’s filings with the Securities and Exchange
Commission, including its reports on Forms 10-K, 10-Q and 8-K. Many of the factors that will
determine the outcome of the subject matter of this communication are beyond Harman’s ability to
control or predict. Harman undertakes no obligation to revise or update any forward-looking
statements, or to make any other forward-looking statements, whether as a result of new
information, future results or otherwise.
Interests of Participants
The Company and its directors and executive officers and certain other members of management and
employees may be deemed to be participants in the solicitation of proxies from the Company’s
stockholders in favor of the proposed transaction. Additional information regarding the interests
of potential participants in the proxy solicitation will be included in the definitive proxy
statement/prospectus and other relevant documents that Harman intends to file with the SEC in
connection with the scheduled special meeting of its stockholders.
CONTACTS:
For Harman International:
For Harman International:
Robert C. Ryan
VP and Treasurer
202-662-2215
VP and Treasurer
202-662-2215
For KKR:
Mark Semer/Ruth Pachman
Kekst and Company
212-521-4800
Mark Semer/Ruth Pachman
Kekst and Company
212-521-4800
For GS Capital Partners:
Michael DuVally
212-902-2605
Michael DuVally
212-902-2605