According to media reports, Research In Motion (RIMM) is looking to sell some of its recent acquisitions, including cloud services provider NewBay that the struggling smart-phone maker bought last year, as part of the company’s broader efforts to restructure its operations.
Faced with an ever increasing competitive landscape, RIM, the Blackberry smartphone manufacturer, acquired NewBay in October 2011 for about $100 million. NewBay reportedly had over 80 million subscribers for its white-label content services when it was acquired. However, the unit, which deals with network operators including Deutsche Telekom, AT&T (T) and Verizon Communications Inc. (VZ), was seen as a relatively small player in the Cloudsphere and a late entry by RIM into cloud computing.
“RIM is coming later to market than competitive offerings” from Apple’s iCloud, Amazon.com’s (AMZN) Cloud Drive and services from Google (GOOG), RBC’s Mike Abramsky wrote at the time in a note to clients.
Earlier this year, RIM, which is amid a restructuring process, sold the email services provider Alt-N Technologies Ltd., acquired in 2009. As part of this restructuring the company hired investment banks RBC Capital Markets and J.P. Morgan (JPM) to explore options, including the sale of the company, as management seems to be unsure about its future prospects.
RIM recently announced unprecedented job cuts totaling 5,000 by fiscal 2013, about a third of the current total staff.
The struggling Canadian smartphone maker, whose nightmare continues ever since Apple’s (AAPL) iPhone hit the market, is making matters worst by continuing to delay the launch of its BlackBerry 10 software based handset, thus further aggravating the stagnancy factor in its product portfolio. Its share of the global smartphone market fell to 4.8% in the 2Q from 12% y/y.
While RIM still has more than $2 billion in cash and is debt-free, it reported in June highly disappointing Q1 2013 financial results. The company said it lost $0.37 a share, more than 5x what the Street had predicted. RIM also failed to provide any specific time frame when the stock’s plunge will ultimately end. (RIMM) is down almost 95% from its mid-2008 high and the shares have fallen more than 60% over the course of the last year alone, putting the co.’s market cap at $4.28bln/$8.29 p/sh.
Meanwhile, according to a report by Bloomberg on Friday, RIM’s enterprise-services unit, seen as the company’s most valuable asset, has attracted the interest of International Business Machines Corp. (IBM). IBM is said to have made an informal approach about possibly acquiring the division, which operates a network of secure servers used to support RIM’s BlackBerry devices.
The business may be valued at $1.5 billion to $2.5 billion depending on the mix of assets included, according to Bberg, citing Berenberg Bank.