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Safeguard Scientifics discloses leadership changes, provides business update

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Safeguard Scientifics discloses leadership changes, provides business update

Brian Sisko stepped down as CEO of Safeguard Scientifics Inc., effective April 1.

Effective the same day, Chairman Robert Rosenthal was named executive chairman and principal executive officer of the company.

Eric Salzman was appointed to the newly created role of chief restructuring officer and will be responsible for all aspects of the value maximization strategy.

Salzman, whose appointment was also effective April 1, had been providing consulting services to the company since Nov. 21, 2019. His career includes serving as managing member of boutique consulting firm SarniHaan Capital Partners LLC.

Salzman will be chief restructuring officer of Safeguard Scientifics for an initial six-month term ending Oct. 1. The initial term will be automatically extended for up to three consecutive six-month terms through April 1, 2022, unless otherwise terminated by Salzman or the company, according to a filing.

The current economic and market conditions brought about by the coronavirus outbreak have impacted Safeguard Scientifics' portfolio.

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

Safeguard Scientifics on April 2 determined that it expects to incur noncash impairment charges of $5 million to $12 million during the three months ended March 31 related to several digital media and other ownership interests due to a more challenging M&A market that is generally reducing valuation expectations and extending exit timelines. In one case, multiple potential buyers indefinitely delayed their proposals due to uncertainties impacting their businesses related to the coronavirus outbreak and the related uncertain economic impact, according to the filing.

In addition, Safeguard Scientifics expects its follow-on funding requirements for full year 2020 to be toward the higher end of, and possibly exceeding, its prior estimate of $5 million to $10 million. Corporate expenses for the full year are expected to be lower than its prior target of $6.4 million to $6.8 million.

Safeguard Scientifics is working with the management teams of each portfolio company to take actions to respond to the changing environment, including implementing cost reduction efforts and securing additional capital.