Let’s make some sense of RIM offloading NewBay, a company they purchased for roughly $100 Million, to Synchronoss Technologies for $55.5 million. RIM bought into the Irish cloud service company and then immediately offloaded it. Integration usually takes about a year. But integration is not what happened between these companies. Old management jumped into the purchase of NewBay without doing their due diligence. They dropped 100 million dollars to get in bed with patents held by NewBay in the domain of content delivery across multiple devices. What RIM hasn’t told us, is that in August of 2011 (prior to the purchase of Newbay), Synchronoss Technology took civil action against NewBay for multiple instances of patent infringement. Selling NewBay so cheap is RIMs way of avoiding costly litigation while they make the smooth transition to BlackBerry 10.In other words the purchase of NewBay was ultimately a costly mistake. RIM has extracted key pieces of IP and software to bolster their BlackBerry Cloud, but the offload of NewBay comes down to its small part in the grand scheme of cloud storage. RIM has further partnered with BOX to offer consumer side cloud services. In the end they paid 45 million dollars for what they wanted from NewBay and have sold off the rest to avoid patent litigation because some aspects of NewBays services have patents held by its new owners. CEO Thorsten Heins foresaw the need of this sell, which is why he hired Zipperstein in July as Chief Legal Officer and also why RIM went into months of strategic review, this sell off is the best outcome of that review. Both companies are happy with the transaction.
RIM Sells NewBay After Extracting $45 Million In Value To Settle Patent Dispute
December 27, 2012 By 1 Comment