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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.

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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.

[continues]

Smart TVs, media connectivity, set-top boxes … smart bulbs?

Sigma disclosed earlier that it is “carefully reviewing all of its product lines to determine which offer the best synergistic fit with its long-term growth plans.”

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%.

Related: ADT Could Go Public for $15B as Early as 2018

About the Author

Julie Jacobson
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Julie Jacobson:

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson

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