RIM sells NewBay cloud unit as part of BlackBerry focus
Research in Motion (NASDAQ: RIMM) has sold its NewBay cloud unit to Synchronoss, a Bridgewater, N.J.-based mobile content management firm, for $55.5 million in cash.
RIM took a bath on the sale, having paid $100 million for NewBay in 2011, according to a report by the Globe and Mail. The Canadian company said that NewBay was not a core part of its future BlackBerry product lineup.
"As we execute our transition and seek to save over $1-billion in operating costs, we have taken the decision to divest NewBay as it was not deemed core for the BlackBerry product roadmap in the future," RIM said in a statement cited by the paper.
Ireland-based NewBay provides cloud services that enable mobile operators and service providers to deliver content across connected devices such as smartphones, tablets, PCs and TVs.
Synchronoss expects the purchase to be "neutral to slightly accretive" to its full year 2013 financial results. The firm plans to provide more financial details in February when it reports its fourth quarter 2012 results, but it said it expects to take a restructuring charge for the acquisition in the first quarter of 2013.
"By combining our strengths, Synchronoss will deliver the most comprehensive, scalable and secure cloud platform, and we will significantly expand our early market share leadership position," said Stephen Waldis, chief executive officer of Synchronoss, in a statement.