from Radio World /
02.05.2013 12:07 PM
Gores Closes on Harris Deal
Sale of the broadcast division, announced earlier, is finalized
LOS ANGELES and ENGLEWOOD, COLO. – Harris Corp. said it has completed its previously announced sale of its Broadcast Communications business to an affiliate of The Gores Group LLC for a package valued at $225 million. The price included $160 million in cash at closing, a $15 million subordinated promissory note and an earn-out of up to $50 million based on performance.
Gores and Harris officials have indicated that the business unit will continue to use the Harris Broadcast name during a three-year transition period. Harris Broadcast divison chief, Harris Morris, said in December that no product lines would be discontinued, and no immediate cuts were planned for the 1,700-person workforce.
Harris Corp., a $6 billion company, announced last May that it would sell the broadcast divison, exiting the sector after 50 years in the industry. The broadcast business got tough for Harris after the completion of the U.S. digital TV transition, when the transmitter sales declined. The division logged an operating loss of $30.8 million on revenues of $486 million for fiscal 2010, a 17 percent decline in revenues from the
previous year. Results were combined with other businesses in 2011, and broken out as
a $447.6 million write-down for fiscal 2012 due to an “unanticipated revenue decline and operating loss” for
fiscal 3Q12. The parent company took another $98 million write-down on the sale in its most recently reported quarter.