Masimo (MASI, Financial) is currently exploring the possibility of separating its consumer business from its healthcare operations, following a recent announcement. This decision comes in the wake of the company confirming its financial guidance for Q1 and the full year 2024. Additionally, Politan Capital, holding an 8.9% stake in Masimo, has put forward two candidates for the company's Board of Directors. Despite these changes, Joe Kiani is expected to maintain his roles as Chairman and CEO of Masimo and lead the newly formed entity.
Masimo operates two distinct segments: healthcare, which includes hospital monitoring and medical technology products, and a non-healthcare segment focused on consumer audio products. The healthcare segment, known for its high renewal rates and low churn, leverages a razor/razor blade model, primarily selling disposable sensors for its monitoring equipment. Masimo plans to introduce a new hemodynamic monitoring system this year. On the other hand, the consumer segment offers products like amplifiers, speakers, and hearables under brands such as Bowers & Wilkins and Denon, with a particular emphasis on the rapidly growing hearables market.
The proposal to separate these business units comes after a challenging year in 2023, marked by decreased consumer spending affecting the consumer segment and changes in hospital monitoring practices impacting the healthcare side. However, Masimo anticipates a return to its normal growth trajectory in 2024, following a period of adjustment.
Investors have shown optimism towards Masimo's potential business separation, recognizing the limited synergies between its healthcare and consumer segments. The involvement of an activist investor to drive change has also been positively received, signaling a hopeful outlook for the company's future.
