BlackBerry is officially off the market. The company has reached an initial agreement with a consortium led by Fairfax Financial Holdings to sell itself for US$4.7 billion.
In an official press release today, the company announced a letter of intent with the holdings company, which will pay out $9 per share for stockholders when due diligence is completed in approximately six weeks (on Nov. 4). The consortium is seeking financing from Bank of America/Merrill Lynch and BMO Capital Markets to complete the sale.
This announcement comes only days after BlackBerry announced a $1 billion loss and plans to lay off more than 40% of its workforce, or about 4,500 employees. The company has made no secret of its desire for a sale, announcing an “exploration of strategic alternatives” headed by a special committee last month. This Fairfax deal is the result.
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Fairfax’s chairman and CEO Prem Watsa said 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.”
Despite the impending sale, BlackBerry is still going ahead with its existing plans for BlackBerry 10 smartphones and BBM expansion.
BlackBerry President and CEO Thorsten Heins said, “As the Special Committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network.”