Boston, MA 04/16/2014 (wallstreetpr) – Globally merger and acquisition deals have been on record high this year with deals of worth over $600 billion already completed. There has been a significant rise in these deals in the technology industry with almost one third of merger and acquisition deals being in the technology industry. On April 15, 2014 Zebra Technologies Corp. (NASDAQ:ZBRA) announced that they will buy enterprise business unit of Motorola Solutions.
Motorola Solutions’ Enterprise Business
This business accounts for almost one third of company’s total revenue. Clients of Motorola’s enterprise business include TNT Express and Wal-Mart Stores, Inc. (NYSE:WMT) but the business has been struggling for some time now with delayed orders from companies and spending cuts. For the first quarter ending March 2014, Motorola Solutions has estimated adjusted earnings of $0.5 per share and $1.8 billion in revenue. The company estimates, however, were lower from average analyst estimates, analysts estimated an EPS of $0.51 and $1.88 billion in revenue for the quarter. Zebra has estimated earnings of around $0.9 per share and revenue of around $288 million for the same quarter.
Dynamics of Deal
The deal will cost Zebra Technologies Corp. (NASDAQ:ZBRA) around $3.5 billion and will be closed by year end. In October, last year Zebra’s Zatar was launched. Zatar, also called ‘internet of things’ is a software that is based on web that allows clients to connect censors and other devices online. This acquisition will help Zebra strengthen its position mobile-computing solutions for business industry. Chief Executive Officer, Zebra, Anders Gustafsson said- “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”. Zebra will fund the acquisition by $200 million cash and $3.25 billion in debt.
After this deal, Motorola will have only government and public safety business left in its portfolio. According to company CEO, Greg Brown said that company intends to return the proceeds from the deal to share-holders.
The news of the deal was taken well by investors which resulted in around 6% increase in Zebra Technologies Corp. (NASDAQ:ZBRA)’ stocks price and a rise of around 3.5% in the stock of Motorola Solutions’.
