Sigma Designs, Owner of Z-Wave Home Automation Tech, Ponders Sale or Spinoffs
Sigma Designs (SIGM) shares were up 5% pre-market on news that it's considering "strategic alternatives" that might include divesting its Z-Wave home-automation group, selling the company or otherwise restructuring.
Sigma Designs (NASDAQ: SIGM), a leading technology provider for TV set-top boxes and IoT devices, has retained Deutsche Bank Securities to "assist in its exploration of strategic alternatives that may enhance stockholder value."
While not giving specifics of potential "alternatives," it's quite possible that Sigma could be sold outright, or that business units could be divested -- business units, perhaps, like Sigma's Z-Wave home automation group?
A strategic acquirer of Z-Wave would make a lot of sense. Sigma has never really recognized synergies between its core set-top box business and the Z-Wave technology that should have been embedded in all those boxes if the two teams actually collaborated.
Z-Wave ownership could probably be much more valuable to a wholly invested party.
As stated in today's PR speak: "This review may result in Sigma continuing to implement value-enhancing initiatives as a standalone company, such as the continued implementation of its previously announced restructuring plans, a sale of the company or certain product lines, or other possible transactions."
Sigma indicates it has not even decided if it will enter into a transaction at all, "and there is no assurance that the Board’s exploration of strategic alternatives will result in any transaction being entered into or consummated."
Seems like that's all we're going to get. The company says it won't provide progress reports until it must disclose by law any proposed transaction.
SIGM was up 5% today in pre-market trading. By midday it was up by as much as 6.97%.
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Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at firstname.lastname@example.org
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