Harris Corporation has reached an agreement to sell Broadcast Communications - which encompasses Harris’s digital signage business - to an affiliate of private equity firm The Gores Group, for $225m (€175m). The price includes $160m (€125m) in cash at closing, a $15m (€12m) subordinated promissory note and an earnout of up to $50m (€40m) based on future performance.
Harris had announced plans to divest Broadcast Communications in May 2012. This acquisition by Gores Group follows its purchase of touchscreen company ELO Touch Solutions in June.
"The sale of Broadcast Communications reflects our strategy to optimise our business portfolio and focus on our core businesses," said William M Brown (pictured), president and chief executive officer of Harris. "As previously communicated, we plan to repurchase up to $200m of our shares after the deal closes. This is in addition to the $200m of share repurchases already planned for fiscal 2013 and reflects our ongoing commitment to effectively deploy capital, including returning cash to shareholders."
"In Harris Broadcast Communications, we are investing in a proven technology leader with great products and a great team. We are excited to provide the capital and support to transition this division to a strong and independent company further enabling it to continue developing and delivering market leading technologies to its customers," said Ryan Wald, managing director of The Gores Group.
The transaction is subject to customary regulatory review and closing conditions and is expected to be completed in early 2013.