Last year October, RIM acquired a Digital Content company (or what we call Cloud Services), NewBay, for $100 million. But today, Synchronoss Technologies, a company that provides mobile content management solutions for connected devices, announced that they have acquired NewBay from RIM for $55.5 million in cash.
This of course does not mean anything, as we know, BlackBerry 10 is still enroute for launch on the 30th of January.
*Updated: read the end for more infomation.
Perhaps RIM got what they wanted from NewBay, or perhaps they feel that partnership is a better way to go forward compared to an acquisition. A bunch of possibilities, but with all the information that we have currently, all we can do is speculate. Either way, we can be sure that RIM is not out of the cloud services game.
Check out the press release below.
| Spoiler Inside: Press Release |
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Synchronoss Technologies Announces Acquisition of NewBay
BRIDGEWATER, N.J.–(BUSINESS WIRE)–Synchronoss Technologies, Inc. (NASDAQ: SNCR), the mobile innovation company that provides activation and mobile content management solutions for connected devices, today announced that it has acquired NewBay, a wholly owned subsidiary of Research in Motion Limited. NewBay is a leader in cloud services, enabling mobile operators and service providers to deliver content experiences across connected devices such as smartphones, tablets, PC’s and TV’s. NewBay’s cloud services are delivered to millions of user and stores billions of media files for live operator services around the world.
In consideration for the acquisition, Synchronoss paid $55.5 million in cash to Research in Motion Limited, and there was no assumption of cash or debt. The transaction closed at the end of the fourth quarter of 2012.
“By adding NewBay’s technology assets and millions of subscribers, this transaction further establishes Synchronoss as the clear leader in providing cloud based mobile content services for mobile operators around the world. 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 G. Waldis, Chief Executive Officer of Synchronoss.
Waldis added, “We are excited to bolster our international presence through the acquisition of NewBay, including a major European mobile operator in the early stages of a significant planned expansion. Additionally, we welcome other international customers that will be new to Synchronoss. We believe that the combination of NewBay and Synchronoss will further ensure the success of the significant cloud services launch being prepared at Verizon Wireless, which remains on schedule.”
NewBay provides an open, white label software platform that powers cloud-based services for storing, sharing, accessing and organizing digital content across any Internet connected device. The company’s technology platform empowers customers to deliver user content services such as social networking, digital vault, photo and video albums, network address book, notification and converged messaging services. Synchronoss’ mobile content cloud platform will be able to leverage many capabilities developed by NewBay, including those related to illicit content protection, legal intercept, copyright, antivirus and transcoding among others. In addition, joint customers will benefit from Synchronoss’ proven track record of taking best-of-breed technologies and scaling them to the highest levels demanded by Tier 1 carriers in order to deliver a world class customer experience.
NewBay’s European customers include a group level implementation at Vodafone Group, in addition to Orange, Swisscom, T-Mobile; U.S. customers include AT&T, T-Mobile, Verizon and US Cellular; and AsiaPac customers include LG Electronics and Telstra.
Synchronoss expects the acquisition will be neutral to slightly accretive, on a non-GAAP basis, to its full year 2013 financial results. Non-GAAP results exclude stock-based compensation expense, amortization of intangibles associated with acquisitions, non-recurring professional fees associated with closing acquisitions and the purchase accounting reduction to deferred revenue associated with acquired companies. Additionally, for GAAP purposes, Synchronoss expects to incur a restructuring charge in the first quarter of 2013 related to the acquisition of NewBay.
The company will provide additional financial details related to the NewBay acquisition on its fourth quarter 2012 financial results conference call, which is expected to occur in early February. At this time, the company will also provide revenue and profitability expectations, including contribution from NewBay, for both the first quarter and full year 2013. Additionally, Synchronoss plans to host its first analyst and investor day at the company’s headquarters in New Jersey during mid-February. Details for both the fourth quarter financial results conference call and analyst and investor day will be issued in subsequent press releases.
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Update from xmad via nerdberry:
What RIM hasn’t told us, is that in August 2011 (prior to the purchase of Newbay), Synchronoss Technology took civil action against NewBay for multiple instances of patent infringement. Selling NewBay so cheap is RIMs way of avoiding costly litigation while they make the smooth transition to BlackBerry 10. In other words the purchase of NewBay was ultimately a costly mistake. But, RIM has extracted key pieces of IP and software to bolster their own BlackBerry Cloud, but the offload of NewBay comes down to its small part in the grand scheme of cloud storage. Furthermore, RIM has partnered with BOX to offer consumer side cloud services. Hence, in the end, RIM paid 45 million dollars for what they wanted from NewBay and have sold off the rest to avoid patent litigation because some aspects of NewBays services have patents held by its new owners.
So now, with this new information, what do you think of this action? I would say that this is a pretty smart move.
