Motorola sells Enterprise business to Zebra for $3.5B

Motorola plans to stay focused on Government and Public Safety business

These days, it seems like everyone is playing a game of Pass the Motorola. Google acquired Motorola’s mobile business for $12.5 billion just two years ago, then sold it to Lenovo for $3 billion back in January. Now, Motorola Solutions has sold its Enterprise business to Zebra Technologies for $3.45 billion in cash.

The Lincolnshire, Illinois-based Zebra makes printers and other products that help businesses track inventory. The company’s products and solutions cover everything from barcode and enterprise printing to motion and location sensing, asset tracking, and Internet of Things solutions.

This is a pretty unique acquisition if only for the fact that Zebra Technologies is a much smaller operation than Motorola’s Enterprise business. Zebra generated $1 billion in revenue in 2013, while Motorola’s Enterprise business generated 2013 sales of $2.5 billion. Zebra plans to hand over $200 million cash on hand, and the remaining $3.25 billion will be raised through a new credit facility and debt securities.

Motorola’s Enterprise business focuses on mobile computing and advanced data capture and communication technologies and services, which will give Zebra a leg up in specific industry segments like retail, transportation and logistics, and manufacturing.

What’s in it for Motorola? The company says it can now focus exclusively on its Government and Public Safety business—which I’ll admit, I did not know that Motorola had a Government and Public Safety business.

Last year, we undertook 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,” said Motorola Solutions’ CEO Greg Brown, in a statement. “Going forward, we will have absolute clarity of purpose and mission as we serve customers globally with our suite of mission-critical communications solutions. This business is truly distinctive in its industry leadership, strong pipeline position, long-term track record of consistent profitability and cash flow, and an array of growth opportunities.”

Zebra has 2,500 employees and offices in some 26 countries. With this acquisition, it will add 4,500 Motorola employees.

The new combined company will have some 20,000 channel partners in over 100 countries. Additionally, Zebra will be getting a big fat chunk of Motorola’s patents, so the combined company will have more than 4,500 patents altogether.

“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 Zebra CEO Anders Gustafsson, in a statement. “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.”