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Zebra grazes Motorola Solutions' enterprise business for $US3.45bn

Motorola to focus on government and public safety markets

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Motorola Solutions has offloaded its enterprise business to Zebra Technologies for $US3.45 billion in cash.

Motorola’s enterprise business offers all manner of kit for asset tracking and communications inside warehouses, during field service engagements and in odd spots like oil rigs. Its product range also includes Wi-Fi kit. Zebra is a barcoding specialist now spinning itself as offering “enterprise asset intelligence” and weaving Internet of Things strands into its story.

The boards of both companies have signed off on the deal, with Zebra CEO Anders Gustafsson saying it will “transform Zebra into a leading provider of solutions that deliver greater intelligence and insights into our customers’ enterprises and extended value chains.”

Motorola Solutions chair and CEO Greg Brown is happy because the deal “will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers.”

Investors in Motorola Solutions should be chuffed: Brown has promised “to return the proceeds to our shareholders in a timely fashion.”

Motorola Solutions' enterprise division hauled about $2.5 billion through the company's doors in 2013, dwarfing Zebra's 2013 tally of just $1.0 billion. The acquired entity's headcount of 4,500 is also rather larger than Zebra's 2,200 or so staff.

Zebra therefore has a challenge ahead of it to manage a much-expanded company.

Why did Motorola divest itself of these assets?

Brown says “...a thorough review of our strategy and concluded that the synergies between our Government and Enterprise businesses were not as great as the value we could create by being singularly focused on our core Government & Public Safety business”. But Brown's not letting go of all of the Enterprise outfit's products: the iDEN radio service stays in Motorola’s hands.

The sale and the strategic review should come as no surprise: Brown raised the prospect of a sale back in October 2013. ®

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