Fairfax Financial Holdings, the Canadian investment fund leading a takeover of smartphone maker BlackBerry, is to invest $250m in BlackBerry via a $1bn private placement of convertible debenture.
The financing move marks the close of BlackBerry's "strategic review" that had effectively put the company up for sale, with Fairfax among a small pack of potential investors considering takeover bids.
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However, the debenture sale, which will also coincide with the departure of CEO Thorsten Heins, means that the sale or dismemberment of BlackBerry is off.
Silicon Valley computer industry veteran John Chen will be brought in as executive chairman of BlackBerry's board of directors, and will replace current CEO Heins on an interim basis until a full-time replacement is found.
Prem Watsa, chairman and CEO of Fairfax, will be appointed lead director and chair of the compensation, nomination and governance committee, while Heins and David Kerr will resign from the board.
"The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders," said Barbara Stymiest, Chair of BlackBerry's Board.
She continued: "This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs."
Chen started his career at systems and services vendor Unisys, before joining Pyramid Technology as an executive vice president in 1991. After it was acquired by Siemens Nixdorf, he was appointed CEO of Siemens Nixdorf's Open Enterprise Computing division, which was run out of Pyramid Technology in California.
He was appointed president and chief operating officer of database company Sybase in 1997, before taking over as CEO in 1998. He shifted the company's emphasis from databases, where it had already lost out to Oracle, towards analytics and mobility. He headed up Sybase until its acquisition by SAP in 2010.
Heins, meanwhile, stood to make $55.6m under the terms of his contract should BlackBerry be sold off. It is unclear how much he will receive in severance pay as a result of his abrupt departure.
