Harris Corp., of Melbourne, Fla., agreed today to sell its Broadcast Communications Division to The Gores Group LLC, a Los Angeles-based equity investment group, for $225 million.
The price includes $160 million in cash at closing, a $15 million subordinated promissory note and an earnout of up to $50 million based on future performance. The transaction is subject to customary regulatory review and closing conditions and is expected to be completed in early 2013.
On May 1, 2012, Harris, a $6 billion company, announced plans to divest Broadcast Communications from its business. “The sale of Broadcast Communications reflects our strategy to optimize our business portfolio and focus on our core businesses,” said William Brown, Harris’ president and chief executive officer. “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 last time Harris listed revenues from its Broadcast Division was during the company’s 20011 fiscal year. Those revenues were reported as $545 million, but recent write-downs have valued the division at approximately $287 million, according to researcher Devoncroft Group. The entire division is being sold intact, according to a company spokesman.
The Gores Group’s current holdings include DialGlobal, the former Westwood One Radio Group.