Vertu, the British smartphone manufacturer known for its luxury devices, has been acquired by Baferton Ltd. for around $60 million, or approximately 50 million British pounds. The sale comes just 18 months after Vertu was purchased by Hong Kong-based Godin Holdings, but this time the deal is considerably more controversial.
Baferton, although a business registered in Cyprus, is funded by Turkish businessman Hakan Uzan according to The Daily Telegraph. The Uzan family was once one of Turkey’s richest, owning newspapers, television stations, banks, and mobile networks; but after accusations of fraud and corruption, and debts reaching $6 billion, its assets were seized by the Turkish government more than a decade ago, and the empire fell.
The mobile network the Uzan Group owned was Telsim, which was built with financial and technical assistance from Nokia — which originally spawned Vertu — and Motorola. Telsim defaulted on payments due on loans a U.S. court deemed to be fraudulently obtained, forcing Nokia to write-off $818 million due to exposure at the time. The Turkish government promised to pay Nokia and Motorola when Telsim was sold off to cover the Uzan Group’s debts. Reports from 2005 indicate Motorola was owned $2 billion by Telsim, and it filed fraud charges against the Uzan family. Payments were eventually made when Telsim was purchased by Vodafone.
Hakan Uzan himself missed court appearances in the U.K. related to the situation, and now lives in exile, with his exact whereabouts unknown. He provided a statement to the Telegraph through a spokesman, calling Vertu a, “powerful brand with an acknowledged market niche,” and added he intends to, “provide investment to enable Vertu to realize its full potential.”
How will this affect the company? Vertu CEO Gordon Watson told Digital Trends in an emailed statement:
“The investment from Baferton will allow us to accelerate our launch plans for this year, which includes a complete refresh of our Signature collection and a new range of smartphones as well as an enhanced services proposition. Looking further ahead we will be in a position to fully realize our product roadmap for 2018 as well as more product diversification.”
During Godin Holding’s ownership, only one new device was announced, the 2017 Constellation. Prior to this, the New Signature Touch was launched in September 2015. Baferton is Vertu’s third owner after Nokia, with the EQT private equity firm paying upwards of $250 million in 2012, before the sale to Godin Holdings in 2015.
Article originally published on 03-13-2017. Updated on 03-13-2017 by Andy Boxall: Added in quote on the sale from Vertu CEO.