By DON O'BRIEN
Herald-Whig Staff Writer
Harris Corp. announced Thursday that it had reached an agreement to sell its broadcast communications division for $225 million to The Gores Group LLC, a Los Angeles-based investment firm.
A high-ranking Harris official called the sale "a positive move" for Harris' Quincy plant, where more than 300 people are employed.
"It's very encouraging that BCD is being encompassed into the Gores Group, which brings a lot of good investment and technology know-how," said Chris Parsons, global vice president of operations and supply chain for Harris Corp. "It's positive for the BCD and all of our communities that work within the BCD."
Harris' broadcast communications division employs about 1,700 people. According to a news release from Harris, the sale price includes $160 million in cash at closing, a $15 million subordinated promissory note and an earn-out of up to $50 million based on future performance.
The transaction is subject to regulatory review and closing conditions. Parsons said it will take between 45 and 60 days for the sale to be finalized.
"In Harris Broadcast Communications, we are investing in a proven technology leader with great products and a great team," said Ryan Wald, managing director of the Gores Group, in a news release. "We are excited to provide the capital and support to transition this division to a strong and independent company, further enabling it to continue developing and delivering market-leading technologies to its customers."
Quincy Mayor John Spring also was encouraged by news of the sale.
"I have done a little research this morning, and the Gores Group looks like a very positive, A-plus company," Spring said. "People who work here should feel good about this. This is a positive sign that the economy is turning around for sure."
Harris announced in May that it planned to sell off its broadcast division. Quincy's plant involves manufacturing for transmission and other devices. In November, Harris confirmed that "about a dozen" salaried employees had been laid off in the wake of a quarterly loss for the company.
Another Harris Broadcast manufacturing facility is in Toronto, Canada, and there are different types of operations in Denver and in Ohio.
"The sale of Broadcast Communications reflects our strategy to optimize our business portfolio and focus on our core businesses," said William M. Brown, president and chief executive officer of Harris, in a news release. "As previously communicated, we plan to repurchase up to $200 million of our shares after the deal closes. This is in addition to the $200 million of share repurchases already planned for fiscal 2013 and reflects our ongoing commitment to effectively deploy capital, including returning cash to shareholders."
The Gores Group was founded in 1987 by Alec E. Gores. It also has offices in Boulder, Colo., and London. It has about $3.3 billion in assets under management. According to its profile on LinkedIn, Gores Group has acquired 60 companies worldwide with combined revenues in excess of $15 billion.
"This is the right time, right place with right opportunity for Gores to form a marriage with BCD," Parsons said. "Mr. Brown has said that BCD doesn't fit for Harris going forward, but it does fit with what the Gores Group wants to do."