(This Aug. 6 story adds dropped time reference in earnings comparison in paragraph 8)
By Greg Roumeliotis
(Reuters) – Zagg Inc, a U.S. manufacturer of protective cases for smartphones and tablets, said on Tuesday it had retained Bank of America Corp to explore “strategic alternatives to maximize shareholder value.”
Reuters reported earlier on Tuesday that Zagg had hired a financial adviser to weigh a sale of the company following acquisition interest from private equity firms.
“We do not expect to comment further on this process until we have made a decision and are prepared to announce its final outcome,” Zagg CEO Chris Ahern said in a statement.
The Salt Lake City-based company has become a takeover target amid softer demand for smartphones and U.S. tariffs on Chinese goods that have hit its supply chain. Its shares have lost close to three-fourths of their value since their peak in November 2017.
Zagg shares ended trading on Tuesday up 15.1% to $6.94 after Reuters reported on the sale deliberations, giving the company a market value of $202 million.
Zagg makes various accessories for electronics, including Gear4 smartphone cases, Braven headphones, and Mophie battery phone cases. Its products are distributed via Best Buy, Verizon, AT&T, Sprint, T-Mobile, Walmart, Target, and Amazon.com.
Last month, Zagg announced the resignation of its president, Brian Stech. Ahern became CEO last year.
Zagg also reported second-quarter earnings on Tuesday, posting a net loss of $5.3 million compared to net income of $3.2 million in the second quarter of 2018. It blamed the decline in consumer demand for smartphone devices.
Zagg also announced operational restructuring initiatives to improve its profitability, including a 10% cut in its global headcount and a crackdown on discretionary expenses.
Reporting by Greg Roumeliotis in New York; Editing by Jonathan Oatis, Matthew Lewis and Sonya Hepinstall