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Zebra Tech Buys Motorola Enterprise for $3.45B

Zebra Tech Buys Motorola Enterprise for $3.45B
By Jennifer LeClaire

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In essence, by acquiring Motorola's Enterprise business, Zebra Technologies is buying up Motorola’s Symbol Group -- its bar code scanner business -- which is a niche operation. But Zebra could find that Symbol is in danger of going Blackberry if it doesn't reinvent itself, said Gartner network and telecom analyst Michael Disabato
 


Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 billion, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal. The ink is expected to dry on the transaction by the end of 2014.

What is Zebra Tech, a recognized name in barcode and enterprise printing, asset tracking, Internet of Things (IoT) solutions, and motion and location sensing, actually getting? Plenty.

Motorola’s Enterprise business is a leading brand in mobile computer and advanced data capture communications technologies and services. The unit raked in about $2.5 billion in sales, excluding sales of iDEN products, in 2013. Motorola is keeping the iDEN business.

"Our Enterprise business is an ideal fit for Zebra," said 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.”

Zebra Bets Big on Tech

Through this acquisition, Zebra enters a segment where Motorola is a strong competitor while also strengthening its position in industries like retail, transportation and logistics and manufacturing. Motorola’s Enterprise business serves about 95% of the Fortune 500.

"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 CEO.

"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."

For its part, Zebra posted sales totaling $1 billion in 2013. The company is betting the combination of its existing technology offerings and asset tracking solutions, together with Motorola’s Enterprise business, will create an industry leader in enterprise asset intelligence for the Connected Age. Zebra noted the merged company would have posted $3.5 billion in sales in 2013.

Going BlackBerry?

Zebra pointed out several “key benefits” to the deal. One advantage is a stronger combined platform with multiple growth opportunities. Another is gaining a new and product, technology and IP portfolio. Zebra also cited as benefits the comprehensive products it offers a variety of global industries, a diversified business mix, and positive cash flow.

We caught up with Michael Disabato, managing vice president of Network and Telecom at Gartner Inc., to get his thoughts on the buy. He told us, in essence, Zebra is buying up Motorola’s Symbol Group -- the bar code scanner business -- which is a niche operation.

“Symbol is in danger of going Blackberry. When you go to the Apple Store, the sales people have an iPhone with a sled on it, so why do they need this special-purpose, very expensive Symbol device that’s running Windows CE when I can put the sled on an iPhone 5 running iOS 7, manage it, and not worry about operating system upgrades?” Disabato asks.

“Symbol could become irrelevant if it doesn’t reinvent itself. These are used in warehouses and shipping docs, so maybe an iPhone isn’t your best bet, but going with an Android or something along those lines and being able to keep concurrency with the operating system may be valuable," he added.
 

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Bob Avon:

Posted: 2014-04-17 @ 11:39am PT
Just a reminder - Motorola paid $3.9b to acquire Symbol Technologies.



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