Motorola Solutions today announced a $3.45 billion cash deal to sell its enterprise business – excluding iDEN product — to Zebra Technologies.
The combined revenue of Zebra Technologies and Motorola’s enterprise business will be nearly $3.5 billion in 2013.
Motorola’s enterprise business (excluding sales of its iDEN products) clocked revenues of around $2.5 billion last year. Zebra Technologies posted sales of $1 billion.
The acquisition will enable Zebra to enter key industry segments such as Retail, Transportation & Logistics, and Manufacturing. Motorola Solutions serve approximately 95 percent of the Fortune 500.
Motorola Solutions CEO Greg Brown says its enterprise and government businesses do not have strong synergies. This is one of the reasons for exiting from enterprise business.
The acquisition of the Motorola enterprise business will expand Zebra’s geographic reach as well. The combined company will have about 20,000 channel partners in more than 100 countries, and will hold approximately 4,500 U.S. and international patents issued and pending.
Approximately 4,500 employees are expected to join Zebra.
As part of the deal, Motorola Solutions will retain its iDEN product portfolio that was part of its enterprise Motorola Solutions CEO Greg Brown business and will continue its government business, including its professional commercial radio product portfolio.
Motorola Solutions will continue to manufacture, design and deliver voice and data communication solutions for government and public safety customers.
“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, chief executive officer of Zebra.
Meanwhile, Motorola Solutions today said its Q1 2014 sales were below the company’s previous revenue outlook, primarily due to softer demand in the North America Government business along with lower than anticipated enterprise sales.
First quarter sales are expected to be approximately $1.8 billion, down approximately 9 percent from the first quarter of 2013. Full-year sales are now expected to decline low single digits in 2014 while operating margins are expected to be comparable to previous guidance.