Belden to sell off Grass Valley
Details
Editor
| 30 October 2019

After conducting what it said was a ‘comprehensive’ strategic portfolio review, networking, connectivity, and cable products manufacturer of Belden is to divest its Grass Valley media technology line.

Belden bought Grass Valley in 2014 for nearly $220 million joining a wide ranging portfolio of media technology acquisitions, the latest of which was Snell in February 2018.

The divestment comes at the same time of a broad-based cost reduction programme that is expected to result in $40 million of annualised savings, and disappointing third quarter results. For the quarter ended 30 September 2019, Belden reported revenues of $620.3 million, down 5.4% annually compared with the third quarter 2018. It also recorded a net loss of $297.0 million, compared with $85.9 million in the prior-year period. Net loss included a $337.0 million after-tax non-cash impairment charge related to Grass Valley.

Subsequent to the end of the third quarter, Belden made the decision to pursue the divestiture of Grass Valley. “We completed a rigorous strategic review of our portfolio of businesses, and today’s announcement marks an important outcome,” explained Belden president, CEO and chairman John Stroup.

“We concluded that it is in the best interests of our shareholders, customers, and employees to separate Grass Valley from Belden. This will enable Grass Valley to more effectively execute its strategic plan and pursue growth opportunities. Further, this separation will simplify Belden’s portfolio and improve organic growth and revenue visibility.”

Belden will immediately begin reporting Grass Valley as a “discontinued operation” on its income statement. It has already begun actively discussing Grass Valley purchase options with interested parties.

For its part, Grass Valley sees the move as positive and pointed out that it was a market leader in the media technology business and a profitable operation with top quartile EBITDA performance. Grass Valley stressed that it was important for the market to understand that ‘discontinued operation’ did not mean that it was going out of business. It added that along with its “uniquely strong” customer and partner relationships it was an attractive investment to those interested in the media tech space.

Indeed, Grass Valley did not expect the divestment announcement to disrupt its current operations and said it would retain its senior management and continue to focus on meeting the needs of customers, partners and employees.