Motorola Splits in Half Again; Zebra Purchases Enterprise Biz for $3.45B

By George L. Koroneos, Editor — April 15, 2014

Just weeks after reaffirming its commitment to its massive channel partner network, Motorola Solutions revealed that it is selling its Enterprise unit to Zebra Technologies for $3.45 billion.
Zebra will be paying about $200 million in cash and will be raising $3.25 billion through credit facilities and debt securities. The company will also inherit approximately 4,500 employees. 
“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.”
Brown explained in an online investor call that the company realized that the synergies between the company’s public sector/government unit and its enterprise business were not as great as the value it could create by being “singularly focused on its core government and public safety business, which ultimately led to the decision to make this transaction.”
This deal feels like deja vu, considering Motorola divided itself into two self-contained corporate entities right before it sold the consumer portion of the company to Google in 2011. Google eventually divested everything but a few key patents to Lenovo in January 2014.
Zebra is now positioned to go head-to-head with Honeywell. As part of the purchase, it will have access to all the rugged handheld computers that were once Symbol’s legacy business. Zebra gains all the new tablet and omnichannel products that Motorola Solutions has invested heavily in over the past few years, including the ET1 tablet and various consumer engagement devices. 
Once known only as a massive printer manufacturer, Zebra can now consider itself a full-blown solutions manufacturer with product lines for retail, hospitality, field service and warehousing. It will be very interesting to see what its roadmap is for the coming year.
Motorola Solution is left with its strong portfolio of radios, particularly the MOTOTRBO brand, which is being leveraged in a number of verticals, including warehouse management and manufacturing. 
The business is comprised of the following key categories:
  • Public Safety, Infrastructure & Devices
  • Professional & Commercial Radio Business
  • Services systems: integration and deployment, support and managed services
While nothing has been spelled out, Motorola’s PartnerEmpower channel program is not expected to change during the transition. However, it remains to be seen how enterprise resellers feel about having to deal with an entire new company. 
On the other hand, it will be very interesting to see how Zebra, a smaller company on paper, will be able to handle the scale and integration of staff and products over the next few months.
"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," stated Anders Gustafsson, Zebra’s chief executive officer, in a release. "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."
The deal is expected to be completed by the end of 2014.

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