Asset-tracking specialist Zebra Technologies has agreed a $3.45 billion takeover of Motorola’s enterprise business in a deal aimed at strengthening its portfolio of services for tracking internet-enabled devices.
Zebra (Lincolnshire, IL, USA) said it would fund the acquisition through $200 million of available cash on hand and $3.25 billion it will raise through a new credit facility and the issuance of debt securities.
Although already approved by directors of both companies, the transaction has yet to win the approval of regulatory authorities, but Zebra is confident of closing the deal by the end of 2014.
“This acquisition will transform Zebra into a leading provider of solutions that deliver greater intelligence and insights into our customers’ enterprises and extended value chains,” said Anders Gustafsson, Zebra’s chief executive officer. “The enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners.”
“It positions Zebra as a leading technology innovator, with the accelerating convergence of mobility, data analytics and cloud computing,” he added.
The deal will leave Motorola (Schaumburg, IL, USA) with only its government and public safety businesses, as well as the iDEN products portfolio – which forms a part of the enterprise business but is not included as part of the transaction.
“Our enterprise business is an ideal fit for Zebra,” said Greg Brown, the chairman and chief executive of Motorola Solutions. “This transaction will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers.”
“Upon closing of the transaction, we intend to return the proceeds to our shareholders in a timely fashion,” added Brown.
Motorola’s enterprise business makes rugged devices, tablets and barcode scanners and Zebra believes that by combining these with its own technology it will be able to bolster its position in several sectors – including retail, transportation and logistics, and manufacturing – that make use of asset tracking and Internet of Things offerings.
A combination of Motorola’s enterprise business and Zebra would have generated revenues of approximately $3.5 billion in 2013 and will see 4,500 Motorola employees join Zebra’s workforce of about 2,600.
Although the enterprise unit has recently struggled – with customers cutting orders and delaying spending decisions – Zebra expects it to be “immediately accretive on a cash earnings basis”.