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Blackberry Businesses

BlackBerry Will Sell Itself For $4.7 Billion 149

Posted by samzenpus
from the circle-of-business dept.
Nerval's Lobster writes "A consortium led by financial-holding company Fairfax Financial has agreed to acquire BlackBerry for $4.7 billion. Under the terms of the agreement, Fairfax Financial will acquire every BlackBerry stock-share it doesn't already own. Further details are pending, including future management structure and whether BlackBerry will continue with its stated intent to lay off thousands of employees over the next few months. 'The Special Committee is seeking the best available outcome for the Company's constituents, including for shareholders,' Barbara Stymiest, chair of BlackBerry's Board of Directors, wrote in a statement. 'Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.' A special committee formed by BlackBerry's Board of Directors had spent the past few weeks looking for a potential acquirer. BlackBerry has seen its market-share crumble as businesses and consumers embrace rivals such as Apple's iPhone and Google Android devices."
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BlackBerry Will Sell Itself For $4.7 Billion

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  • by Anonymous Coward
    If only I could.
    • by jellomizer (103300) on Monday September 23, 2013 @02:29PM (#44926381)

      Checking last years balance sheet 4.7 billion is about how much RIM has in owned property.

      • by McGruber (1417641) on Monday September 23, 2013 @03:14PM (#44926929)

        Checking last years balance sheet 4.7 billion is about how much RIM has in owned property.

        Does that $4.7 billion balance sheet include the $1 billion worth of unsold phones that Blackberry is stuck with?

        (As reported in the Wall Street Journal: http://online.wsj.com/article/SB10001424127887323308504579087471781835480.html [wsj.com])

        • Does that $4.7 billion balance sheet include the $1 billion worth of unsold phones that Blackberry is stuck with?

          Is that $1B MSRP or $1B in cost? If it's $1B in cost, they can release their Android port (CM preferably), put an unlocked bootloader on it, and offer them for sale at cost, and they will sell out and recover their $1B.

          • by jbolden (176878)

            Android apps run on BB phones. Why bother with a port which amounts to a downgrade? Who would want a Z10 with Android that doesn't want a Z10 with BB10?

            • Who wants to run almost Android apps [as I believe you need to actually make some changes for it to work, you can't just download an app off GooglePlay and side-load it on a BB] on an OS with a completely different UI/navigation system.

              • by jbolden (176878)

                It has the Android UI for application support.

        • by spasm (79260)

          That's a liability not an asset - disposing of ewaste is expensive.

      • by jratcliffe (208809) on Monday September 23, 2013 @04:39PM (#44927797)
        Looking at the balance sheet, there's about $2.8BN in cash, $900MM in inventory (figure that's basically zero now), and payables exceed receivables by about $1BN, so you're looking at a liquidation value of around $2BN. There's $2.2BN in property/plant/equipment, but it's highly unlikely you could actually get $2.2BN for that.
  • I wonder how long they really were shopping it around.
  • Layoffs? (Score:1, Funny)

    by Anonymous Coward

    Layoffs? So thousands of RIM jobs are at stake?

    • Re:Layoffs? (Score:5, Insightful)

      by Kielistic (1273232) on Monday September 23, 2013 @02:26PM (#44926331)

      Sigh. Not only did that joke stop being funny years ago (if it ever was funny) but RIM is no longer in their name anyway.

      • It's still funny.
        Deal with it.
  • Consortium (Score:5, Interesting)

    by Anonymous Coward on Monday September 23, 2013 @02:22PM (#44926295)

    What I am most curious about is who is part of that consortium. That will be the most telling about the future of BlackBerry.

    My guess is a collection of tech companies that want to keep BlackBerry's patents out of the hands of a patent troll and thus the company will be closed down, sold off in parts, and otherwise officially killed and the patents will be shared among the consortium companies and kept safe. Because, let's be honest - BlackBerry is dead - there is nothing else of significant value remaining in the company.

    RIM (and Nokia) made the biggest mistake possible by ignoring the iPhone and what it represented to the entire mobile industry. Their complacency killed the company. They changed far too little, faaaaaar too late.

    (Ironically, my captcha was "overtake"...)

    • Bingo. When I read the headline, I said "4.7 BILLION??? That's crazy!!" - but for an Apple, a Microsoft, a Google, a portion of that $4.7B is cheap insurance to keep those BlackBerry patents off the street and in the hands of other Mutual Assured Destruction patent players.
    • What I am most curious about is who is part of that consortium.

      According to this [www.cbc.ca] it's Bank of America Merrill Lynch and BMO Capital Markets. It's telling how little the commpany is being sold for. The company is basically being sold for the value of it's current assets ($2.6 billion in cash reserves, patent portfolio, software, etc.). Seems like the buyer has no intention to turn the company around and get profits out in the future.

    • RIM (and Nokia) made the biggest mistake possible by ignoring the iPhone and what it represented to the entire mobile industry. Their complacency killed the company. They changed far too little, faaaaaar too late.

      It's hubris. In their book The Innovator's Solution [amazon.com], the authors describe the problem with Blackberry and outline the iPhone strategy as the way to solve it. It's literally the textbook example and they ignored it.

      But I think Steve Jobs read it - "great artists steal".

    • Probably a couple of Canadian pension funds according to the WSJ. That combination would be plenty to fund this small of a deal. They don't need to bring in tech companies unless someone overpays to lock up assets and avoid a bidding war on the open market. Thinking ahead a little, patents and real assets are pretty obvious but the brand could be interesting. A Chinese OEM might think big and buy the brand (sort of like Lenovo and IBM). Maybe a little crazier, BB might be trying to force the hand of a poten
    • RIM/Blackberry purchased Certicom. So they have all the Certicom patents on elliptic curve encryption.

      But now the NSA leaks have led people to believe that the NSA may have broken ECC. So the value of all those patents just went to $0 since if no one is going to trust ECC to be secure, no one is going to use it. Another own goal.

    • by felipekk (1007591)

      BlackBerry is dead - there is nothing else of significant value remaining in the company.

      I've been out of the IT industry for a while, but is there any product that works like BlackBerry's Enterprise Serve (suite) for Android / iPhone / Windows Phone?

      I remember reading a couple of years back that RIM had purchased a company that was developing software like that for Android / iPhone.

      It's been five years but I remember that BES, even though it was a pain to install, worked like a charm for the Enterprise.

      • by acoustix (123925)

        I've been out of the IT industry for a while, but is there any product that works like BlackBerry's Enterprise Serve (suite) for Android / iPhone / Windows Phone?

        No and it is sad. There's nothing out there that comes even close to BES. Policy management on iOS, Android and Windows Phone is a joke. I struggle to keep my company's information private, but it's impossible. Once an iOS or Android phone has access to my company's ActiveSync then my company has no control over how that data is handled.

        We're currently trying to use XenMobile, but it doesn't work either. I try to block access to iCloud. But then the employees can't backup their personal data. Very fr

    • by jimicus (737525)

      RIM (and Nokia) made the biggest mistake possible by ignoring the iPhone and what it represented to the entire mobile industry. Their complacency killed the company.

      I'd agree that complacency killed the company - but I'd disagree that "ignoring the iPhone" was the issue.

      I'd say that "ignoring Exchange ActiveSync" was the issue. A cursory glance at Exchange ActiveSync would have told anyone who cared to look that here is a feature that is aimed squarely at replacing BES/Blackberry with EAS/(insert non-blackberry phone here). With the added bonus that as it's integrated with Exchange, there's no need to buy, install and manage a third-party product.

      Yeah, OK, EAS may not

  • Prediction: (Score:4, Interesting)

    by dudeman2 (88399) on Monday September 23, 2013 @02:26PM (#44926339) Homepage

    In 2 years time, watch for this news headline:

    "Fairfax Financial announces a $4.6 billion writedown on the value of their BlackBerry acquisition. Layoffs are proceeding. Fairfax Financial has announced plans to sell off all corporate assets including BlackBerry's patent portfolio. A buyer has not been identified at this time."

    • Re:Prediction: (Score:4, Insightful)

      by PoliTech (998983) on Monday September 23, 2013 @02:34PM (#44926441) Homepage Journal
      Not to argue, but in a few weeks time I expect something more along the lines of this: "From the desk of S. Balmer: We announced some exciting news today: We have entered into an agreement to purchase Fairfax Financial’s BlackBerry Devices & Services business, which includes their smartphone and mobile phone businesses, their award-winning design team, manufacturing and assembly facilities in Canada, and teams devoted to operations, sales, marketing and support." If MS isn't doing this they are nuts (a possibility to be sure). Adding a BlackBerry acquisition to the Nokia deal would get MS to nearly 20 percent of the smartphone market.
      • By buying Blackberry, Microsoft will be able to drive an even larger portion of the smartphone market into the ground.

        • by Ravaldy (2621787)

          Actually their share of the market is currently increasing. They have more than doubled their presence in that market in the last 12 months. Although I don't see how buying RIM would help them at this point.

          • by Desler (1608317)

            Yeah, "more than doubled" to 3.3%!!! [gartner.com]

            In the smartphone operating system (OS) market (see Table 2), Microsoft took over BlackBerry for the first time, taking the No. 3 spot with 3.3 percent market share in the second quarter of 2013. “While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users,” said Mr. Gupta. Android continued to increase its lead, garnering 79 percent of the market in the second quarter.

            OMG!!!!

            • by hairyfeet (841228)

              And the reason why is obvious, instead of listening the started dictating to customers so that for every one they get they lose a dozen.

              Look at me as an example, as somebody who has used and sold Windows systems since the days of 3.x I would be a prime candidate for a WinPhone, what did I get? an Android. Why? Because after the "just deal with it" bad attitude of their games division, the flipping the bird to desktop users AND refusing to port WinPhone 8 to WinPhone 7 buyers, thus leaving them with a worthl

              • by Ravaldy (2621787)

                The device is still supported but doesn't support the new OS. I don't see a difference with Android. On the other hand iOS keeps providing OS updates to all versions of their phone and let me tell you it's just incentive to upgrade your hardware because it usually wrecks the experience (it did in my case and many other users I know).

                Your opinion is only based on your tech savy usage of the device. 95% of users can't update their Android OS if it's not automatically done.

                • by hairyfeet (841228)

                  Uhhh...I live in a SMALL town and there is already 4 different shops that offer upgrading android phones as a service. Remember the creed of the small business "if somebody needs it done somebody is willing to do it for a price" and this is a small town, in any large city you could probably have 2 dozen shops to choose from.

                  That doesn't change the fact that MSFT gave early adopters the finger so now I wouldn't give them even $20 for a WinPhone. With Android i can go with AreaRomQ, Cyanogen, or at least 2

            • Some simple math based on the numbers in your link:

              Android market share went from 64.2% to 79%, that's a 23% increase since last year.
              iOS went from 18.8% to 14.2%, that's a 24% decline.
              Windows Phone went from 2.7% to 3.3%, that's a 27% increase.

              Also keep in mind that WP is the newest of the 3 platforms and still has room to grow while the others are pretty much saturated at this point (or have already started declining as is the case with iOS).
            • by Ravaldy (2621787)

              OMG!! is right. They are increasing their market share contrary to what everybody on /. has been saying for the last 6 months.

          • by PoliTech (998983)
            "@Ravaldy; Although I don't see how buying RIM would help them at this point."

            RIM is still a (albeit shrinking) player in the enterprise. I think a possible MS acquisition (or as others have suggested, a Blackberry "Patent buy") could go a long way toward enhancing the attraction of the Win mobile phone environment to enterprise IT.

      • by whoever57 (658626)
        I expect something more on the lines of: "In order to protect our smartphone business, we have purchased a number of patents from Fairfax .... . The terms of the deal include a limited license back of the patents"
    • Re:Prediction: (Score:4, Interesting)

      by McGruber (1417641) on Monday September 23, 2013 @03:25PM (#44927053)

      In 2 years time, watch for this news headline:

      "Fairfax Financial announces a $4.6 billion writedown on the value of their BlackBerry acquisition. Layoffs are proceeding. Fairfax Financial has announced plans to sell off all corporate assets including BlackBerry's patent portfolio. A buyer has not been identified at this time."

      The problem with this scenario is that Fairfax's Chairman and CEO Prem Watsa, who controls half of its stock. Watsa is a self-made man; he graduated from the Indian Institute of Technology Madras in 1972, then migrated to Canada.

      People who know a lot more about investing than I do refer to Mr. Watsa as the Canadian Warren Buffet.

      • by dudeman2 (88399)

        Watsa may know a lot about investing, and I'm sure he has plans for the company, but I sincerely hope that restoring BlackBerry's former image/reputation/market share are not on his list. It can't be done, and you can quote me on that. Corporations are moving to BYOD on iPhone/Android, and the non-corporate market is completely lost to BlackBerry. How is Watsa going to make a profit on his investment? Selling off the corporate assets piecemeal, or selling the whole thing to a Greater Fool (sure, Ballmer

        • by McGruber (1417641)

          Corporations are moving to BYOD on iPhone/Android, and the non-corporate market is completely lost to BlackBerry. How is Watsa going to make a profit on his investment?

          The three leading smartphone options (Android, Apple and Microsoft/Nokia) are all controlled by US companies.

          Going forward, I think many corporate and government purchasers are going to see a lot of value in standardizing on smartphones from a non-US company given all of the recent NSA revelations.

        • by Xest (935314)

          Blackberry's strength was always in the enterprise. There are still thousands of massive organisations to this day using Blackberry devices.

          You're right that the BYOD trend is eating into this but I don't think it's as widespread as you believe - a lot of employees explicitly want a separate work device if not only so they can turn it off when they get home and not have to deal with work in their own time.

          But ignoring all that there's no reason Blackberry couldn't move into providing enterprise solutions on

    • I don't share your optimism that the newly-purchased business unit will last 2 more years.

    • by msmonroe (2511262)
      You're probably right. This is a sad day, I never thought I would see this happen. This is what happens when you lose vision. They're biggest assets is probably the patents. Sounds like someones going patent trolling.. They can probably sue they're way to riches.
    • by jimicus (737525)

      Doubt it.

      I'm offering evens that this purchase has just one plan in mind: Asset-strip the company.

  • I'm kinda surprised that there's anyone that actually wants to buy RIM.
    • They're not RIM anymore, and the purchase price seems to match the valuation of their assets. I'm as surprised by this as you are.
    • They own several billion in buildings, patents, factories, etc.

      Even if they liquidate tomorrow, they don't lose that much.

      Plus, Blackberry actually owns a few really important patents, for example, a critical patent on eliptic curve cryptography, which is the foundation off the next generation of cryptosystems.

      Interesting, to say the least.

      • by gl4ss (559668)

        that's the thing.. if they liquidate successfully tomorrow they don't lose too much.

        but in that case, why the fuck bother?
        and if they liquidate two years from now, they might be already in the hole for 4 billion.

        so what exactly is their angle? or did these guys already own a lot of it?

    • I'm kinda surprised that there's anyone that actually wants to buy RIM.

      It still has cache' in business and government. If they released an Android device with good e-mail navigation and "enterprise" management bolt-ons, they'd do quite well.

  • I'll buy that for a dollar :D
  • So that it can die in peace. Blackberry's problems don't stem from it being a public company - taking it private will only shield us all from the morbid details.
    • by jbolden (176878)

      There are some interesting possibilities with BlackBerry. I can imagine lots of small profitable business that one can get out of it. I don't see any reason it needs to die, it just needs to accept that it isn't going to be going toe-to-toe with Google or Apple anymore.

  • Atari, Commodore, Nokia, RIM/BlackBerry.

  • So just a few days after Blackberry pre-announces horrible quarterly results with a $1 Billion write down, suddenly a white knight appears to snap up the company at the post-earnings depressed stock price, for what is essentially book value. Like how Dell wasn't timid about producing horrible results while trying to take the company private for cheap. I wonder if Blackberry would have been so aggressive with their inventory write down if it didn't suit Fairfax's rationale for buying the company for nothing.
    • by jbolden (176878)

      Maybe not. But Blackberry has been saying for 2 years they wanted a buyer and legitimately their strategy kinda sucked. I think you are right about the timing but there is no major conspiracy here.

  • by CohibaVancouver (864662) on Monday September 23, 2013 @03:07PM (#44926851)
    Comparisons between Nortel and Blackberry are unfair. Although the burst of the internet bubble contributed tremendously, the nail in Nortel's coffin was fraudulent accounting and improperly booked revenue which led to the principals being criminally charged. None of this occurred with Blackberry - BB was the victim of bad corporate decisions and management reacting too late to the iPhone and Android effect. Disappointing to the extreme, but very different from the Nortel story.
  • by Overzeetop (214511) on Monday September 23, 2013 @03:11PM (#44926885) Journal

    Fire everyone, chop it up into marketable parts, sell the hard assets for cash, license the IP through a troll. It's the MBA way.

    • by jsepeta (412566)

      yep, expect next year to see blackberry's IP assets used in litigation vs Apple and Samsung and Microsoft. Not Google -- everyone's afraid of them.

  • From technology leader to also ran. That's a sad thing to say from just 6 to 7 years ago when Blackberry was at the top and their shares were over $400.
    This needs to go down in history as another epic fail for missed opportunities and complacent management. RIM was innovative, they pushed technology boundaries and had a rock solid platform for the enterprise. Unfortunately in a series of missteps they allowed themselves to look like fools when India and Middle Eastern countries bullied them looking for s

  • by ErichTheRed (39327) on Monday September 23, 2013 @03:24PM (#44927045)

    In all reality, this private equity firm is probably going to strip all the remaining assets from BlackBerry and kill the company, but being out of the limelight is the best thing for a company in this situation to do.

    When a company is publicly traded, you can _maybe_ get it to agree to changes that pay off in 1 or 2 quarters. The stock analysts and CNBC idiots make it so that every time the CEO goes to the bathroom is scrutinized for any shred of news. Anything beyond that 2-quarter limit just can't be done. Anything that involves tough decisions that affect share price can't be done either. BlackBerry needs that kind of time out of the public eye to fix the problems they have. It's too bad also -- because we're stuck in the position of having our retirements dependent on the fickle stock market (those of us without pensions, that is.) I think that if the stock market went back to being a rich man's club, and we didn't have entire news organizations waiting to pounce on every utterance that company executives make, the funding picture for companies would be much better. Look at how much negative press BlackBerry has endured -- no matter what they do, every news outlet says "they suck." Gee, why can't we keep the share price up? Why isn't anyone ignoring the advice and investing?

    I echo the sentiments of others in this thread though -- Microsoft would be stupid to not buy the patents they have, and they could even fold the secure messaging stuff into Exchange.

    • by jbolden (176878)

      Well the stock market can't be a rich man's club and be the funding source for most companies.

      Frankly the market is far more rational today than it was 15 years till 2009 or so. Blackberry's discounted value of future dividends was low and the repricing reflected that.

  • Nortel?

    Another of Canada's former world leading tech giants bites the dust. I wonder what would have happened if RIM hadn't been blocked from buying Nortel assets. [thestar.com] Would they have been diversified enough to weather this storm, or would RIM/BB have still cratered themselves.

    • Didn't Nortel have "accounting irregularities" to deal with as well?

      Other than that, it sounds familiar. If I remember correctly, Nortel overextended themselves during the dotcom boom, and didn't have anything to fall back on once people stopped buying networking gear. I think IBM got most of their patents -- there's a separate company that makes network switches for their blade systems.

      I think Sun did something similar also -- too much overspending in the dotcom days, then people stopped buying expensive U

  • Is it just me, or is this somewhat fishy? First, the company posts an almost billion-dollar loss on Friday then botches the BBM to iOS/Android rollout. And then once the share price is driven down to almost $8, sells itself for $9 / share.

    And of course there is this: http://www.thestar.com/business/2013/08/16/blackberry_ceo_thorsten_heins_could_get_556_million_if_ousted_after_sale.html [thestar.com]

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