Politan vs. Masimo: Quentin Koffey's Two-Year Proxy Campaign That Ended a 35-Year Founder

The pulse-oximetry market covers the real-time monitoring of blood-oxygen saturation in clinical settings, including neonatal ICUs, operating rooms, and emergency departments. The market is worth roughly $3 billion globally, and Masimo's Signal Extraction Technology has functioned as the clinical standard for more than two decades. Competitors include Medtronic (which absorbed Nellcor), Philips, and GE Healthcare, but Masimo has maintained an edge in motion artifact rejection and low-perfusion accuracy. Through the early 2020s, medical-device companies increasingly attempted to extend into home monitoring and wearables, but bridging clinical credibility and consumer price points remained difficult.

The capital-allocation playbook in medical devices typically involves core R and D, adjacent clinical extensions, and reinforcement of the regulated product pipeline. The Sound United deal hit none of those criteria. It pushed Masimo into a consumer category dominated by Apple and Sonos, where its clinical brand provided little competitive advantage. The fact that Politan's grievance was a specific, quantifiable capital-allocation failure rather than abstract governance complaint is what gave the campaign its force.

Masimo is a medical-device company founded in 1989 by Joe Kiani in Irvine, California. Its core technology, Signal Extraction Technology, measures blood-oxygen saturation accurately under patient motion and low perfusion conditions, and has functioned as the clinical standard for monitoring in neonatal ICUs, operating rooms, and emergency departments. After its 2007 NASDAQ listing the business grew steadily, with revenue rising from roughly $0.86 billion in FY2018 to about $1.24 billion in FY2021. Following the April 2022 close of the Sound United acquisition, FY2022 revenue jumped to roughly $2.0 billion, but the company's identity, EBITDA margins, and capital-allocation discipline came under sustained scrutiny.

There is no traditional purchase here. The structure is activist: open-market accumulation, two proxy contests, and a reconstituted board. Politan raised roughly $440 million of dedicated capital between May and August 2022 to acquire about 8.9 percent of Masimo in the open market, then converted that stake into four of nine board seats across two annual meetings before pushing for a direct vote against the founder's reelection.

Both sides retained top-tier activism advisory benches. Politan worked with Sidley Austin on the proxy mechanics and Innisfree on solicitation. Masimo defended with Sullivan and Cromwell on the legal side and Goldman Sachs and Centerview on financial advice, including the consumer-business separation review. Two years of back-to-back proxy fights, with multiple rounds of settlement talks in between, likely translated into eight-figure advisory bills on each side.

Advisor identifications are based on SEC filings and press reporting; actual scope may differ.

Units: $M (USD millions). Source: Masimo Corporation Annual Report (10-K) FY2018 through FY2022. FY2022 reflects approximately 8.5 months of Sound United contribution following the April 11, 2022 close.

Politan argued that Masimo's core healthcare franchise was trapped in a conglomerate discount created by the Sound United deal. At Politan's entry around mid-2022, Masimo's market capitalization was roughly $6 billion. After the first proxy win in June 2023, the second proxy win in September 2024, and the Sound United separation decision in late 2024, the market capitalization recovered toward $10 billion. Politan's roughly 9 percent stake, entered at about $440 million, was worth roughly $900 million plus on a mark-to-market basis by late 2024, implying a mark-to-market gain of more than $400 million.

Valuation figures are estimates based on public market data and SEC filings; Politan's actual entry and exit prices are not disclosed.

Following Kiani's September 2024 resignation, Masimo operated under interim CEO Michelle Brennan while preparing the separation of Healthcare and Sound United. Through 2025 the board moved toward a permanent CEO appointment and finalized the separation transaction. The stock continued to recover from late-2024 levels, with the healthcare franchise on a standalone basis trading near pre-Sound United multiples again. Politan retained its position as one of Masimo's largest shareholders and continued to exercise influence over the reconstituted board. Kiani publicly maintained his framing of Politan as Wall Street activists who damage medical innovation, but the market read the outcome as a clear activist win.