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Motorola Solutions sells enterprise biz for $3.45B

Posted: 17 Apr 2014     Print Version  Bookmark and Share

Keywords:Motorola Solutions  Zebra Technologies  enterprise  IoT  cloud 

Motorola Solutions Inc. has announced that it will sell its enterprise business unit to Zebra Technologies Inc. for $3.45 billion in cash and debt. According to Greg Brown, Motorola Solutions' chair and CEO, the deal will position Motorola as a "singularly focused pure-play leader in mission-critical communications."

The leaner Motorola will consist of two key businesses. One is a division focused on products for the core public safety and commercial systems and devices business, which garners about $4.1 billion in annual revenue. The other is a $2.1 billion services business, which includes systems integration, managed services and smart public safety. Motorola Solutions will keep its iDEN product portfolio that was part of its enterprise business, and it will continue its government business including its professional commercial radio product portfolio.

Motorola Solutions sells enterprise business

After buying Motorola's enterprise business, Zebra plans to focus on IoT, mobility and cloud apps. (Source: Motorola Solutions)

"This is a stable business with solid long-term growth and operating leverage position," Brown said. He projected low- or mid-single-digit growth over the long term.

Motorola has been selling off different strategic businesses over the past 15 years. Once a pioneer in cellular handsets, the company spun off its handset business in January 2011, creating Motorola Mobility Holdings Inc., which Google later bought for nearly $12.5 billion. This year, Google turned around and sold the company to Lenovo.

In 2003, Motorola decided it would divest its struggling chip business. It launched Freescale Semiconductor in an initial public offering the following year. In 1999, it spun off its Semiconductor Components Group, creating ON Semiconductor.

The latest move was motivated by a recent review of Motorola's strategy. Management concluded that the synergies between Motorola's government enterprise businesses "were not as great as the value we could create by being singularly focused on our core government and public safety businesses," Brown said. "The government and enterprise businesses have differentiated customer channels and opportunities, and we believe the enterprise business is a perfect fit for Zebra."

Zebra makes barcode and enterprise printing, asset tracking, IoT, and motion and locating sensing products. The company generated $1 billion in sales last year. By adding Motorola's $2.5 billion enterprise business, which includes mobile computing and advanced data capture communications technologies and services, Zebra expects to emerge as the industry leader in the enterprise asset intelligence sector.

"Between both companies, we will be able to supply products for the key trends in the way enterprises are going to be deploying applications" in the Internet of Things, the cloud, and the mobile channel, Philip Gerskovich, Zebra's SVP for new growth platforms, told EE Times. "We think we can offer better solutions and in particular as the industry moves ahead to the next wave technologies."

Zebra and Motorola have a common set of customers, vertical markets and channel partners since together they provided a whole solution.

For example, Zebra manufactures printers for making barcodes and labels, as well as RFID encoders that encode ID tags. It also sells software frameworks for building IoT applications. Motorola's enterprise business is on the receiving side, selling products that read the barcodes and RFID tags. The unit's biggest category is mobile computers, which were once based on Microsoft Windows but now employ the Android mobile OS, Gerskovich said.

"But unlike the consumer smartphone, these are ruggedised, and they have integrated barcode and RFID scanning, which we think is really critical for enterprise use of those devices," he said.

Zebra will gain about 4,500 Motorola employees. Many of them are engineers, who shouldn't be affected by the acquisition. The deal is expected to close at yearend, Gerskovich added.

- Ismini Scouras
  EE Times

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