The Masimo board fight has just got dirtier, with the directors of the former Sound United Company, now slagging each other off, with claims that the acquisition of the audio Company by a health Corporation was ill-conceived, poorly planned, and was an ineffectively executed acquisition.
Some are even suggesting the Masimo Consumer that was earlier this year spun off into a separate entity, business should be “given away” to stop it hurting the Companies health care business that is performing better than the premium sound Company.

Masimo was founded by Joe Kiani an audiophile who acquired Sound United, when his objectors to the acquisition accused him of damaging the health care business.

Because of the impact that the acquisition was creating for the core Masimo business Kiani accepted the concept of spinning the business into a separate entity which is where it sits today.

A key shareholder in the business is Politan Capital Management whose CIO is Quentin Koffey, he now wants to control the Company and was dead against the acquisition of brands such as Bowers & Wilkins, Denon and Marantz, but he did suggest the spin off which Kiani accepted.

Now Koffey wants to get his representatives onto the board so that he can take control of the business.

David Beckham partners with Bowers & Wilkins (Image: Supplied by Bowers & Wilkins)

David Beckham partners with Bowers & Wilkins (Image: Supplied by Bowers & Wilkins)

Last week Masimo and its Board of Directors filed a lawsuit against Politan Capital Management in which it alleged Politan’s proxy materials contained material misrepresentations and asked the court to order the activist investor to correct them.

The mud flew thick and fast.

Two days later Politan responded with a countersuit in which it asked the court to order Masimo to hold its 2024 Annual Meeting of Stockholders as soon as possible.

This is a board meeting that could see the sale of the consumer business despite ChannelNews, being told that an initial potential buyer has already walked because of the internal fights among board members.

The fight for control of the California-based, multi-billion-dollar health technology company is being led by the Company’s founder, Chairman, and CEO, Joe Kiani the aggressor is Quentin Koffey, an avaricious founder and activist investor, who has been ‘waging war’ for the last two years against Masimo ever since Sound United was acquired.

Kiani claims that Koffey is trying improperly gain control of the Company through lies and deceit.

What’s been filed in a US Federal Court ahead of Companies AGM has been described as ” A steamy paperback novel for summer reading”.

“Koffey is desperate to take control of Masimo at any cost, for personal gain and to the ultimate detriment of the Company and long-term stockholder value – using lies, misrepresentations, mischaracterizations, and deceit, as well as misusing confidential Company information he gained from inside the Masimo boardroom itself.” claims the Companies founder.

From Politan’s perspective, every day they saw example after example of broken corporate oversight by a Board clearly in the pocket of a powerful CEO.

There is no legitimate assessment of opportunities, analysis of process, or insightful business planning they claim, and the acquisition of the Sound United business should never have happened they claim.

The latest lawsuit waxes poetically about all the good things the proposed separation of Sound United would have done for the company.

The separation proposal was highly favourable for both Masimo and its stockholders. It would have given Masimo the ability to sell 70-85% of its Consumer Product Business at an attractive price, while paying down debt and providing stockholders with some residual ownership in the consumer business.

The lawsuit filed by the current board ahead of the meeting claims “The Potential Joint Venture also presented a valuation of the Consumer Products Business that was three times higher than the valuation Koffey assigned to it just two months earlier.”

Masimo’s lawsuit suggests that “Koffey sabotages the spin-off deal he himself proposed,”

The lawsuit goes to great lengths to complain about Koffey’s actions and activities that are not illegal – but apparently annoying to other board members.

Koffey did offer an idea for the Board to consider, telling them that “a major stockholder would like to see Masimo get rid of the Consumer Products Business.”

The lawsuit goes on to add, “When asked what price Masimo should be willing to take for that business, Koffey replied that the stockholders would be happy if Masimo gave the Consumer Products Business away for nothing.”

The Koffey team claim that Sound United’s declining results are negatively impacting the company’s overall performance…and depressing its stock price.

As for the future of the former Sound United business executives running the business, are confident that several new products will lead to an increase in the Company’s fortunes.

Ironically, several other premium audio Companies including Premium Audio Company, Voxx International, Focal and Naim as well as a multitude of others are struggling to grow sales due to consumer headwinds impacted by inflation issues.