Updated, 10:14 a.m. |
Motorola Solutions on Tuesday agreed to sell much of its enterprise business to the Zebra Technologies Corporation for $3.5 billion, leaving the remaining company focused heavily on government and public safety products.
Zebra Technologies is paying cash for the unit, though it will be borrowing heavily to finance the acquisition.
Zebra will be getting a number of Motorola Solutions’ product lines, including enterprise mobile computing, bar-code scanning technology and wireless LAN, or local area networking.
The deal will allow Zebra to expand its global presence, as more companies – from Amazon to General Electric – look to gain greater real-time information about how their products are shipped and bought around the world.
Motorola Solutions said it would keep its iDEN product line, which was part of its enterprise business, and would continue in its government business, which includes two-way radios and other devices for public safety. The businesses that are remaining as part of Motorola Solutions had 2013 revenue of about $6.2 billion, the company said.
Motorola Solutions will be “manically and singularly focused on growing this public safety business,” the company’s chairman and chief executive, Greg Brown, said in a conference call on Tuesday.
The proceeds from the unit sale are expected to be distributed to Motorola Solutions shareholders, in a manner to be determined in the future.
Separately, Motorola Solutions said on Tuesday that its first-quarter revenue was expected to be down about 9 percent when compared with the first quarter of 2013. Full-year 2014 revenue is also projected to decline.
“Revenues in the quarter did not meet our expectations due primarily to lower than expected volumes in our North America government business in addition to a push out of certain enterprise orders late in the quarter,” Mr. Brown said in a statement.
After Motorola Inc. split into two publicly traded companies in 2011, Motorola Solutions wrapped in a number of business units that Motorola had acquired over years, including its wireless networking business and its enterprise radio systems operations.
The deal will give Zebra several complementary businesses to its existing product lines.
“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,” Anders Gustafsson, Zebra’s chief executive, said in a statement on Tuesday.
Zebra Technologies, along with the Motorola Solutions business lines being sold, would have had combined revenue of about $3.5 billion in 2013. About 4,500 employees are expected to join Zebra after the deal is completed. Zebra is also acquiring about 4,500 patents.
Morgan Stanley advised Zebra on the deal, while Goldman Sachs and JPMorgan Chase advised Motorola Solutions.
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