BlackBerry announced today that it has agreed to a buyout offer from a consortium led by Fairfax Financial Holdings for approximately $4.7 billion. The company has signed a letter of intent agreement for the deal, which will see the company sold for $9 for every share not owned by Fairfax, which already owns about 10 percent of the company. The deal is subject to due diligence that’s expected to be completed by November 4. Once that’s clear, the plan is for BlackBerry to go private once again, though it can seek other offers until then.
The deal will likely mark the end of the struggling mobile company as we know it today. Once a worldwide leader in the mobile business (it was worth more than $80 billion just five years ago), BlackBerry has been overwhelmed by a market now dominated by Apple and Android smartphones. Despite a last ditch comeback attempt with its BlackBerry 10 OS and accompanying devices, BlackBerry has been dwarfed in the consumer sector, and is losing ground with its once lucrative enterprise base as well.
Last week, BlackBerry revealed that it’s expecting losses of around $1 billion in the most recent quarter, largely due to the commercial failure of its BlackBerry Z10 and BlackBerry Q10 handsets. It plans on laying off some 4,500 employees, or 40% of its workforce, as part of a transition away from the consumer market. Going forward, it plans to refocus its efforts towards professionals and the enterprise segment.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” said Fairfax CEO Prem Watsa in a statement. “We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”
Source: BlackBerry (via MarketWired)