News Feature | April 14, 2014

Zebra To Acquire Motorola's Enterprise Business for $3.5 Billion

John Oncea

By John Oncea, Digital Editorial Director

HITO Zebra 450 X 300

Transaction expected to be completed by end of the year, enhancement of growth prospects, creation of value expected

Zebra Technologies announced it “has entered into an agreement to acquire the Enterprise business of Motorola Solutions.”  According to Zebra CEO Anders Gustafsson, “Zebra’s acquisition of the Enterprise business will combine the complementary offerings of two industry leaders in asset tracking solutions to create a market leader in enterprise asset intelligence for the Connected Age.

“Motorola Solutions’ mobile platform captures real-time data about physical assets, people, and transactions across the enterprise. Zebra’s enabling technologies provide visibility into business operations for deeper insights and smarter decision-making. The companies’ shared commitment to innovation will help customers harness powerful technology trends like the Internet of Things (IoT), location and motion sensing and mobile enterprise cloud computing. We look forward to the months ahead as we integrate the businesses and continue to serve you with the highest quality.”

Zebra issued a press release which notes the acquisition will be an all-cash transaction for $3.45 billion and “will be funded through a combination of cash on hand and new debt. The transaction, which was approved by the Boards of Directors of both companies, is subject to customary closing conditions including regulatory approvals. The transaction is expected to be completed by the end of 2014.”

“’Our Enterprise business is an ideal fit for Zebra,’ stated Greg Brown, Motorola Solutions chairman and CEO. ‘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.’”

A fact sheet issued by Zebra notes, “The combined organizations will offer integrated visibility and connectivity solutions for the retail, healthcare, manufacturing, and transportation and logistics industries. Together, the leading brands of Zebra and Enterprise will have approximately 7,100 employees worldwide, expanding the geographic reach of the company to provide even more opportunities to market our products and solutions.”

Strategically, Zebra expects, “the ability to provide end-to-end solutions for enterprise asset intelligence powered by a significantly-improved vertical marketing approach to accelerate growth.” Financially, the expectation is to “generate significant cash flow to reinvest in these innovative technologies, pay down debt and create value for shareholders.”

The Chicago Tribune quotes Northcoast Research analyst Keith Housum as saying, “It's an aggressive play by Zebra to fortify their position in the entire AIDC (automatic identification and data capture) space.” Bloomberg quotes Tavis McCourt, an analyst with Raymond James Financial Inc., as saying, “For Zebra, this is an opportunity to bundle additional products into the portfolio they already offer their customers.” It also quotes Michael Genovese, an analyst at MKM Partners, as saying, “Motorola does not have the enterprise focus or creativity to compete with tablets and iPhones – I think Zebra does. This is a good transaction from that perspective.”