Reuters reports this morning that BlackBerry is considering following Dell Inc.’s lead in pulling out of public markets and taking its technology company private, in a story based on anonymous sources.
Part of the speculation around BlackBerry going private are its recent links to Silver Lake Partners about collaborating on enterprise computing. That’s the same firm that is looking to take Dell private, along with founder Michael Dell. The motivation for getting off the public market would be to relieve shareholder pressure on the Waterloo, Ont.-based smartphone manufacturer as it attempts to retain its former glory as a dominant player in the market.
BlackBerry’s decline on the public markets has been well reported, its shares dropping from a $70 price in early 2011 to the single digits in recent days. Even as the company pushes out its well-reviewed BlackBerry 10 products worldwide, it has been forced to make layoffs and become a leaner operation.
Perhaps in going private, it could replicate the success of business analytics software firm SAS Institute. Commonly cited as one of the world’s most valuable private software companies, it has never made one single layoff in company history. Without shareholder pressure, its able to horde large cash reserves that help the company weather tough times. Its 2012 fiscal year revenues were reported at $2.87 billion.
But where would BlackBerry stand as a private firm? While it has been shrinking in value as a company, it still reported over $11 billion in revenue for its 2012 fiscal year. That’s a good deal less than its previous year of $18.4 billion, but still high enough to land it on the list of North America’s most valuable private firms.
Dell for example, reported $56.9 billion revenue for its fiscal year end Feb. 1. According to Forbes’ list of America’s Largest Private Companies that places the firm in number three spot by revenue, behind food, drink and tobacco firm Cargill, and Koch Industries. It would be ahead of confectionary firm Mars, with $33 billion in annual revenue.
BlackBerry would end up at spot number 25 on the list. It’d be behind trading firm Transammonia with $11.3 billion revenue, and ahead of household products firm Amway at $10.9 billion revenue.