Vertical integration works in the Japanese car industry, so why not in Canadian telecommunications?
Smartphone designer Research In Motion
I don't think the phone giant would have bought this outfit under happier circumstances. The company's strengths lie in hardware, and software sales account for just 3% of the company's sales. And Chalk's business has been eroding over the past few years. The little company has never made an annual profit, and sales have fallen from about $4.2 million in 2005 to $1.6 million in the last four quarters.
The sale price for the whole kit and caboodle is $23 million Canadian, or about $18.5 million in American cash. On top of that, RIM is lending $2.2 million Canadian to its beau just to make sure it can survive until the wedding date. That's why I think of this deal as a bailout.
Research In Motion certainly needs all the business heft it can muster these days. With the global economy locked in a death-defying dive and competition from newcomers like Google's
Stock news, financial commentary, and your daily dose of Foolishness: Get plugged in to The Motley Fool on Twitter!
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.