Strategy in TECH...
In yet another clear sign that the era of the gadget is over, once prodigious gadget-seller Radio Shack files for bankruptcy on Wednesday…again. This is the second bankruptcy filing for the company in just two years. A strategy of partnering with Sprint didn’t produce the revenue the new owner’s anticipated and this second filing was unavoidable. So what happens now?
Melrose Industries PLC, an engineering turnaround company that recently acquired Nortek, Inc. (parent company of Core Brands) announced last week that it sees margins improving at Nortek already, even though it only acquired the company just last year. Not only that, but thanks to adding Nortek to its stable of investments, Melrose has seen its revenues triple – driving its stock to a record high.
B. Riley & Co., a full service investment bank, announced the closing of a series of refinancing transactions that have completely restructured the outstanding significant debt of Gibson Brands, Inc. Gibson, as we have reported on regularly, entered the consumer electronics space back in 2012, investing in brands such as Onkyo/Integra, Teac, and buying Philips accessory business. Recently, the company appeared to be running into debt difficulties, perhaps from taking on debt to purchase these companies.
Samsung Electronics has made another major investment in the Internet of Things (IoT) space, becoming an early stage Series A investor in Bayshore Networks. The company made the investment via its Samsung NEXT Venture fund, an investment fund created by the company to find and take positions in companies that are driving businesses that will yield future profits for the company.
We learned Wednesday that private equity powerhouse Bain Capital has apparently found a buyer for D+M Group, selling it off to another private equity company – Boston-based Charlesbank Capital Partners. CCP is the owner of DEI Holdings, a division of which is Sound United LLC, parent company of Polk Audio, Definitive Technology, and Polk BOOM. It is Sound United that will now also take over D+M Group and its brands Denon, Marantz, HEOS by Denon and Boston Acoustics.
Toshiba Corp. announced yesterday that it will take a $6.3 billion writedown to account for the meltdown of its nuclear division. This amount of writedown is much higher than the markets had anticipated, forcing Toshiba into crisis mode having to secure lending commitments from their banks, reorganize their nuclear division, and sell assets to offset their losses.
Sony Corps’ struggling film division, which hasn’t seen a major hit movie in a long while, has finally forced the company to take a writedown against third quarter earnings of a substantial $1 billion. The difficult decision was necessary to adjust or right-size the value of their operations and will mostly be booked against goodwill – to reset the value of the various film-related divisions.
Tidal, the musician-owned music streaming service put together by rapper Jay Z, announced this week that it has sold a third of the company to telecom giant Sprint. Although the original announcement did not disclose the price, Billboard, the music industry trade journal, said that Sprint invested $200 million for a 33% stake in the company.
After a tough 2016, Samsung was likely looking for a little relief in 2017. They’ll have to keep looking because, as the old saying goes, “When it rains, it pours.” Reuters is reporting that prosecutors in South Korea have summoned Samsung Group leader Jay Y. Lee for questioning in a probe into an influence peddling scheme that may topple the president of the country and offer criminal indictments for some of the players.
Lee has been named as a suspect in the matter.
Calling 2016 “a year of transition,” NAPCO Media announced yesterday that it has printed its last Technology Integrator (TI) magazine – deciding to withdraw from print media and reinvent itself into an online-only property. The move has been rumored for weeks, and in an online post yesterday attributed to the “TI Staff”, the company made the news official.
