Belden makes public its intention to divest from Grass Valley

The group intends to divest from the media technology business, where it entered after the purchase of Grass Valley, while announcing a plan to save $40 million a year.

Belden has announced the results for the third quarter of 2019 while making public its intention to divest Grass Valley and the launch of a cost reduction program about 40 million dollars a year.

Los third quarter revenue of 2019 totaled 620.3 million dollars, which represents a decrease of 35.5 million (5.4%) compared to the same period of the previous year (655.8 million). The net losses were 297.0 million, a considerable increase compared to the 85.9 million in the third quarter of the previous year. These losses represent an after-tax non-cash impairment charge of $337 million related to Grass Valley.

Excluding Grass Valley, adjusted revenues totaled 533.1 million, decreasing by 20.9 million (3.8%) from the third quarter of 2018.

After announcing these poor results, Belden has made the decision to divest from Grass Valley, since it already considers it a burden on its income statement.

John Stroup, president and CEO of Belden, highlights that "we have completed a rigorous strategic review of our business portfolio, and today's announcement marks an important result. We conclude that it is in the best interest of our shareholders, customers and employees to separate Grass Valley from Belden. This will allow Grass Valley to more effectively execute its strategic plan and pursue growth opportunities. In addition, this separation will simplify Belden's portfolio and improve organic growth and revenue visibility."

From now on, the group Belden intends to focus on industrial automation, cybersecurity, broadband, 5G, and smart buildings. "This portfolio, while smaller, offers greater predictability and multiple platforms to accelerate organic growth and margin expansion. Additionally, we continue to see numerous opportunities for disciplined capital deployment as we invest in compelling inorganic opportunities in these robust markets," Stroup concluded.