Research in Motion Sells NewBay Cloud Services Division to Cut Costs, Boost Cash

By Friend, David | The Canadian Press, December 28, 2012 | Go to article overview

Research in Motion Sells NewBay Cloud Services Division to Cut Costs, Boost Cash


Friend, David, The Canadian Press


RIM sells NewBay cloud services division

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TORONTO - Research In Motion Ltd. (TSX:RIM) has sold its NewBay services subsidiary for US$55.5 million, hardly a year after the BlackBerry-maker bought the cloud services company, as the company makes changes to its operations ahead of the launch of its new smartphones early next year.

The Waterloo, Ont.-based tech company confirmed the deal made with buyer Synchronoss Technologies on Friday, saying that NewBay wasn't a core part of its future BlackBerry product lineup.

But the price tag of the sale was about half of the near $100 million that RIM reportedly paid for NewBay in October 2011, in the final months before Jim Balsillie and Mike Lazaridis were replaced as co-chief executives.

Their successor, Thorsten Heins, has been restructuring the company since taking over earlier this year, digging deep into its operations for more ways to cut spending and shore up extra cash while it tightens the focus of its business.

The goal was to save $1 billion by the end of its financial year in February, but the company has said it already achieved those goals ahead of schedule, and would move to make further cost reductions.

Earlier this year, RIM hired two adviser firms to search for strategic options, which included the potential sale of parts of the company.

NewBay, headquartered in Ireland, provides Internet services that allow customers to store and share content like photo albums and other data, through smartphones, tablets and other devices.

"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. …

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