Initial reaction is varied to the news that the sale of the Harris Broadcast Communications Division has been finalized.
Broadcast Electronics President/CEO Joe Roark said the buyer, the Gores Group, is the type of firm that will come in and try to make operational improvements in its new purchase. “Gores Group will try to find synergies, reduce costs and raise cash,” according to Roark who also predicts further workforce cuts and consolidation at Harris. Harris recently laid off a small percentage of its Quincy, Ill. workforce in the broadcast division, we reported. Roark says now, the “culture at Harris will likely be one of absolute performance.”
Some private equity firms like the Gores Group seek distressed properties, improve those properties and then resell them within five years’ time, according to Roark. However he believes the Gores Group “will make sure to take care of the existing Harris customer group.”
He characterized the $160 million cash portion of the price as low, but sees it as an indication of how tough the broadcast manufacturing industry is right now. We’ve reported at one time BE was interested in purchasing at least part of the division. Harris, however, wanted to sell-off the broadcast equipment division as one unit.
Vice President of Radio Engineering for Greater Media Milford Smith said he’s pleased a deal is now done with a seemingly well-funded buyer. The expected sale of the division, announced after the NAB Show, left uncertainty which has not been good, in his opinion, for the Harris Broadcast Division nor for the industry.
“Folks are understandably hesitant in some case to purchase equipment with long anticipated lifetimes not knowing the ‘lifetime’ of the manufacturer,” said Smith. “Hopefully this announcement puts that uncertainty to rest and both the Harris Broadcast Division and the industry can move forward with confidence in their business dealings.”