Technicolor is exploring options that include a full or partial sale of the French digital media company, Reuters reported.
Technicolor operates two main divisions, entertainment services and connected home. The entertainment services business provides the visual effects seen in movies and commercials, as well as Blu-ray and DVD manufacturing.
Technicolor has also been exploring a sale of just its STB division, which it calls connected home.
Connected home accounted for 1 billion euros or $1.14 billion of Technicolor’s total revenue of 1.77 billion euros in the first half of 2018.
Technicolor’s set-top box (STB) business struggles because of higher prices for memory chips.
A deal would represent the biggest shakeup for the company, based in Issy-les-Moulineaux, since it agreed in March to sell its profitable patent licensing business to US wireless technology provider InterDigital for $475 million.
The report said Technicolor has been in discussions in recent months with other companies and private equity firms, including Bain Capital, about a sale of the company or a merger with a peer.
Technicolor has a market value of 503 million euros on France’s Euronext stock exchange.
Technicolor in 2015 acquired Cisco Systems’ set-top box business in a $600 million deal to boost its presence in the home entertainment market and expand its North American footprint.
But the bet soured as higher input costs weigh on Technicolor’s set-top box business. Passing these costs on appears difficult given the strong bargaining power of its larger customers and competition in the equipment sector, credit ratings agency Moody’s Investors Service said in a note earlier this year.
Technicolor’s adjusted earnings before interest, taxes, depreciation and amortization from continuing operations fell 30 percent year-on-year in the six months to the end of July to 57 million euros.
