BlackBerry has found a buyer. The once-dominant smartphone maker has agreed to preliminary terms with a consortium led by Fairfax Financial Holdings, which is offering to pay $4.7 billion for the company. The agreement is subject to regulatory approval and final negotiation, so it's not a finished deal. Fairfax still has to shore up financing. It also has six weeks to conduct due diligence.
Although BlackBerry is free to solicit other bids during that period, it's hard to imagine there being much interest. Last Friday, the company announced a billion-dollar loss attributed primarily to unsold inventory of the new Z10 handset. The smartphone maker also revealed that it would cut 4,500 jobs—about 40% of its workforce.
Fairfax has a vested interest in BlackBerry's success; it already owns about 10% of the company. According to Fairfax CEO Prem Watsa, the plan is to take BlackBerry private to focus on "superior and secure enterprise solutions." Given how much the NSA spying scandal has been in the news lately, that may not be an unwise strategy. BlackBerry has clearly failed to win over customers in the consumer space.
According to The Globe and Mail, Watsa is open to partnering with another technology firm. BlackBerry certainly has a lot of patents that could have some value for a bigger fish. As it stands right now, Watsa expects a "significant portion" of the financing for the deal to come from Canada. It will be interesting to see if the offer goes through—and if BlackBerry can find success refocusing its efforts on enterprise customers.
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