TORONTO - Research In Motion Ltd. (TSX:RIM) sold its NewBay services subsidiary to Synchronoss Technologies because it wasn't a core part of its future BlackBerry product lineup, the company said Friday.
NewBay provides Internet services that allow customers to store and share content like photo albums and other data, through smartphones, tablets and other devices.
RIM acquired NewBay in October 2011, in the final months before Jim Balsillie and Mike Lazaridis were replaced as co-chief executives. Their successor, Thorsten Heins, has been restructuring the company since taking over earlier this year.
"As we execute our transition and seek to save over $1 billion in operating costs, we have taken the decision to divest NewBay as it was not deemed core for the BlackBerry product roadmap in the future," RIM said in a statement.
The deal was first announced Thursday by Synchronoss, which said it paid US$55.5 million.
The deal provides Synchronoss access to NewBay's European customers, which include Vodafone Group, Orange and Swisscom. Its U.S. customers include AT&T, T-Mobile, Verizon and US Cellular. NewBay also works with LG Electronics and Telstra in Asia.
Synchronoss expects the acquisition will be neutral to slightly positive, on an adjusted basis, to its 2013 fiscal year results. The company said it would provide more details in February when it reports fourth-quarter financial results.
RIM shares traded in Toronto on Friday at $11.87, up 17 cents. Synchronoss shares gained 72 cents to US$21.21 on Nasdaq.