Medical technology company Masimo Corp announced on Friday that it is considering spinning off its consumer business, encompassing consumer health and audio products, leading to a 13% surge in shares during after-hours trading.
In 2022, Masimo made headlines with its acquisition of audio products manufacturer Sound United LLC for $1 billion. However, the move was met with skepticism from investors, causing shares to plummet by 37% and wiping out approximately $5 billion in market capitalization.
Following the acquisition, Quentin Koffey’s Politan Capital Management acquired a 9% stake in Masimo, aiming to advocate for changes within the company.
Masimo intends to retain its healthcare and telehealth products, anticipating that the spinoff will enhance the profitability of its healthcare segment.
Current CEO Joe Kiani is slated to continue serving as chief executive while also assuming the role of chairman in the newly formed entity, according to Masimo.
The company anticipates completing the separation “as soon as feasible.”
Headquartered in Irvine, California, Masimo has attracted attention since October when it filed a lawsuit against Apple, alleging the tech giant stole trade secrets related to blood-oxygen level monitoring technology for its watches and violated Masimo patents.
