International. The Belden investment group, as part of its third quarter 2019 earnings announcement, announced a cost-cutting program that includes the intention to divest in Grass Valley.
According to the Belden Group statement, "After the end of the third quarter, the Company made the decision to pursue the sale of Grass Valley. Based on the approval of Belden's Board of Directors to divest from this business and the likelihood that such divestiture will be consummated, Grass Valley's financial results will be presented as discontinued operations in our fourth quarter and full year 2019 financial statements and prior periods will be restated for consistency."
John Stroup, President and CEO, Belden commented, "We completed a rigorous strategic review of our business portfolio, and the announcement marks an important outcome. We conclude that it is in our best interest for our shareholders, customers and employees to separate Grass Valley from Belden. This will allow Grass Valley to more effectively execute its strategic plan and pursue growth opportunities. In addition, this separation will simplify Belden's portfolio and enhance organic growth and revenue visibility."
For its part, Grass Valley stressed that it does not expect this announcement to disrupt its current operations and will continue to focus on meeting the needs of customers, partners and employees. Belden will immediately begin reporting grass Valley as a "discontinued operation" on its income statement. It is important to Grass Valley that the market understands that the phrase "discontinued operation" does not imply, in any way, that Grass Valley will go bankrupt. The term "discontinued operation" is a standard accounting term used when a corporation decides to abandon a portion of its business in general. It's a way to differentiate that part of the business from other "ongoing operations."
It should be remembered that Belden began strong growth in this sector in 2012 with the purchase of the Miranda company. In 2015 it acquired Grass Valley and unified the technologies and operations of both. In 2018 it announced the purchase of Snell Advance Media, a company generated after the union of Snell and Quantel years ago. During these six years Belden has also acquired other companies.
Now it will be necessary to wait who stays with Grass Valley.
