Struggling mobile handset giant, Nokia, which yesterday announced another 10,000 job cuts, today said that it will sell its UK luxury phone unit Vertu to Northern Europe-based private equity firm EQT VI, for an undisclosed amount.
The Espoo, Finland-based company, which was in talks for the sale private equity firm Permira, (See: Nokia in talks to sell luxury phone unit Vertu) did not disclose the terms of the deal, but said that it will retain a 10-per cent minority stake in Vertu and expects the deal to close at the end of the second quarter.
Several media reports suggested that the deal size could be around $250 million.
Nokia launched its UK subsidiary Vertu in 1998 to cater to the growing demand for luxury phones targeting wealthy and status-conscious customers. The phones, hand-made and studded with crystal and precious stones cost up to €245,000 ($325,000).
Vertu phones are hand-made in its factories in Hampshire, and each phone is made up of hundreds of components made from stainless steel, ceramics, carbon fibre and finest grade leather. The screens of all handsets are made of ultra-thin sapphire crystal that takes fifteen days to make. Some of the most expensive handsets may include 18k yellow, white, or rose gold, or platinum, along with diamonds. Every key is individually ground and cut from sapphire.
Vertu currently employs around 1,000 people globally. It has steadily seen constant growth these past years and is the undisputed leader in the high-end mobile handset segment.
Vertu has offices in Paris, Frankfurt, Dubai, New York, Singapore and Hong Kong, and flagship stores in London, Paris, Milan, Singapore, Hong Kong, Tokyo, New York and Las Vegas. Vertu's phones are sold in over 500 stores in 66 countries around the globe.
Sweden-based EQT and its rival Permira and a few other luxury goods companies were in the race to acquire Vertu.
EQT VI said Vertu fits well its investment strategy and plans to develop the brand as a standalone company.
"EQT VI is excited about the opportunity to develop Vertu as a standalone company and plans to drive the development of the luxury mobile phone category through significant investments in retail expansion, marketing and product development," said Jan Stahlberg, investment advisor to EQT VI.
"This is a logical next step in the evolution of Vertu as the world leader in luxury mobile products," Vertu president Perry Oosting said.
"Since Vertu began in 1998, our business has grown every year, due to the efforts of our talented workforce and the unique products and services we offer to our customers. We believe that EQT VI will position Vertu to continue to grow and lead in our marketplace," Oosting added.