Safeguard Scientifics to implement changes in business strategy and operations
Safeguard Scientifics announced that the board and management have determined to implement a change in the company's business strategy and operations. This decision follows an extensive review and assessment of options to increase shareholder value that was undertaken in consultation with financial and legal advisors. Under the new strategy, Safeguard will not deploy any capital into new Partner company opportunities and will focus on supporting its existing Partner Companies and maximizing monetization opportunities for Partner Company interests to enable distributions of net proceeds to shareholders. The company will consider initiatives including, among others: the sale of individual Partner Companies, the sale of certain Partner Company interests in secondary market transactions, or a combination thereof, as well as other opportunities to maximize shareholder value. Safeguard anticipates distributing to shareholders net proceeds from the sale of Partner Companies or Partner Company interests, as applicable, after satisfying the company's debt obligations and working capital needs. The company also announced it is implementing an immediate initiative to generate annual cost savings of between $5 million and $6 million, which reflect changes in the company's personnel and operating cost requirements under the new strategy. Corporate expenses, excluding interest, depreciation and stock-based compensation were approximately $16 million in 2017. The company has not set a timetable for completion of the monetization and distribution process. However, the Board and management team recognize the value and benefit in achieving well-timed risk adjusted returns for the benefit of shareholders under an appropriate cost structure.