SeaChange Off the Block, CEO Exits
Big changes are afoot at SeaChange International Inc. (Nasdaq: SEAC), a video software and hardware specialist that has been the subject of rampant M&A rumors in recent months.
The company announced Wednesday that company Founder, Chairman and CEO Bill Styslinger is retiring and being replaced by board member Raghu Rau on an interim basis as the company seeks a permanent CEO. SeaChange board member Thomas Olson, the former CEO of Katz Media Group and National Cable Media, is now the vendor's chairman of the board.
SeaChange also put to bed rumors that it's about to be bought. "After an extensive review of strategic alternatives, the board has decided that it is in the best interest of shareholders to continue as a standalone publicly traded company," SeaChange said in a statement.
Arris Group Inc. (Nasdaq: ARRS) emerged as a potential buyer in May, but sources say Arris's interest dwindled as it now has its hands full with its recent acquisition of BigBand Networks Inc. (Nasdaq: BBND). Multiple industry sources have told Light Reading Cable that at least three private equity firms have also been kicking the tires at SeaChange in recent weeks.
Why this matters
Styslinger's exit isn't a huge surprise, as the exec has been skating on thin ice for awhile. Last year, one of its largest investors, Ramius Value and Opportunity Advisors LLC, urged the board to separate Styslinger's functions as chairman and CEO, upset that the company did not sell its "non-core" servers and storage business when it had a chance to. SeaChange instead decided to reorg and reduce its investment in hardware, which has become a liability as top customers, such as Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Verizon Communications Inc. (NYSE: VZ), went in a different direction on servers.
The company didn't come out and say it, but expect it to re-try to sell its hardware business as it's been styling itself as a software company but still has servers going into Tier 1s, such as Cablevision Systems Corp. (NYSE: CVC) and Rogers Communications Inc. (Toronto: RCI). "The Company is focused on significantly improving and streamlining operations, and the board will continue to evaluate alternatives for certain non-core businesses," it said.
SeaChange is expected to offer more details about its moves when it reports third-quarter results Dec. 8.
Catch up on the SeaChange chronicles.
- Shareholder Puts SeaChange's Feet to the Fire
- SeaChange Softens Up, Cuts Staff
- Comcast Gives SeaChange Servers the Boot
- Arris Sets Sights on SeaChange
- SeaChange Snags VividLogic for $12M
- SeaChange Goes Dutch for VoD Smarts
— Jeff Baumgartner, Site Editor, Light Reading Cable