Thomson To Sell Grass Valley Unit
French conglomerate seeks to address debt problems with sale
By Glen Dickson -- Broadcasting & Cable, 1/29/2009 5:07:05 PM
French conglomerate Thomson says it will divest its Grass Valley unit, which makes broadcast production gear including cameras, editors, switchers and servers, in an effort to shore up its balance sheet.
Thomson, which will report its full fiscal 2008 results on Mar. 10, announced that its unaudited consolidated revenues for the fourth quarter of 2008 dropped 8.2% compared to the previous year, to some $1.9 billion, while its unaudited net debt stood at roughly $2.7 billion. The company said it is going to refocus its business on "services to content creators", such as its Technicolor business and its digital set-top business, and rid itself of non-core assets including Grass Valley and the PRN digital signage business. Those two units contributed $1.3 billion in sales in 2008.
"Today we announce the refocusing of our business on content creators, leveraging our technological expertise and our positioning with network operators," said Thomson CEO Frederic Rose in a statement. "Strengthening our balance sheet is the precondition to implementing this strategic framework."
Rose, a 15-year veteran of Alcatel-Lucent, took over the CEO role at Thomson in Sept. 2008 after the company's long search to replace Frank Dangeard. Dangeard was responsible for a slew of transactions earlier this decade as Thomson sought to become an all-encompassing video-solutions provider.
But the synergies promised by those acquisitions has never materialized, and over the past two years Thomson has faced pressure from shareholders to improve its financial performance by better integrating its disparate businesses, which include the Thomson Grass Valley broadcast business, the Technicolor film-processing and services division and a set-top arm that has primarily been focused on Europe but that recently won a large contract from U.S. operator Comcast.
Thomson said it "will explore with its main creditors and potential investors solutions in order to improve its balance sheet consistent with its strategic framework" and that it is being assisted in these efforts by financial advisors Perella Weinberg Partners and Ph. Villin Conseil and by the law firm Davis Polk & Wardwell.
Grass Valley spokeswoman Denise Williams had no comment on the divestiture but said that Grass Valley's plans to exhibit at the NAB show in April remain in place.
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