Vantiva to unload supply chain unitVantiva to unload supply chain unit

Vantiva is looking to streamline its business after making plans to sell its Supply Chain Solutions (SCS) unit to funds managed by Variant Equity, a Los Angeles-based private equity firm.

Vantiva said the proposed transaction, which followed a "competitive and impartial selection process," is based on an SCS valuation of $40 million. SCS is focused on third-party logistics, high-precision manufacturing (including the production of DVDs and vinyl records), fulfillment and distribution.

The deal, architected as a put option, is the first big move for Vantiva under Tim O'Loughlin, who was appointed as CEO in October. O'Loughlin, an exec late of Arris and Pace, took over for interim CEO Lars Ihlen.

Vantiva said the move to sell SCS will help it optimize its resources toward video, broadband and related technologies and spur its "shift toward a more customer-centric strategy."

"We are very pleased with the prospect of selling SCS to Variant. Given their focus on corporate divestitures and previous industry experience, we believe they are the best-suited partner for moving the business forward," O'Loughlin said in a statement.

The proposed sale arrives nearly two years after Technicolor was split into two separately traded companies: Vantiva, a company now laser-focused on video and broadband customer premises equipment (CPE) and related software; and Technicolor Creative Studios, a company focused on visual effects for games, movies and advertising.

Minor part of Vantiva

SCS is a minor and declining part of Vantiva's business. In Q3, SCS pulled in 118 million euros (US$122.28 million), down 11.9% year-over-year. Vantiva blamed the decline on a slowdown in consumption in North America, a reduction in investment programs by major operators and the continued decline in the optical disk market.

SCS represented just 21% of company sales in Q3. The SCS unit has 2,381 employees on the payroll, or about 52.35% of Vantiva's total, the company confirmed via email.

By comparison, Vantiva's Connected Home division generated €436 million ($451.82 million), up 28.6%. Connected Home accounted for 79% of Vantiva revenues in Q3. Vantiva's Q3 results at  Connected Home were aided by Vantiva's recent acquisition of CommScope's Home Networks division.

The proposed transaction aims to help SCS focus on and optimize its core business.

"As a stand-alone company, SCS can accelerate diversification strategies, including expanding our precision manufacturing and third-party logistics services, while maintaining our focus on the production and distribution of physical media content," Rob Wipper, president of SCS, said in a statement.