Zebra Tech. To Buy Motorola Solutions' Enterprise Business For $3.45 Bln

(RTTNews) - Inventory tracking company Zebra Technologies Corp. (ZBRA) has agreed to acquire the Enterprise business from Motorola Solutions Inc. (MSI) for $3.45 billion in an all-cash deal, which Zebra management expects to be immediately accretive on a cash earnings basis. The transaction, approved by the boards of both the companies, would be funded via. a combination of cash on hand and new debt. The deal may close by the end of 2014.

Motorola's Enterprise business recorded 2013 pro-forma sales of about $2.5 billion, excluding sales of its iDEN products. With the help of this transaction, Zebra would enter the segment where Motorola's Enterprise business competes and strengthen its position in key industries including Retail, Transportation & Logistics, and Manufacturing and serve nearly 95 percent of the Fortune 500, the company added.

The transaction is likely to be funded with around $200 million of available cash on hand and $3.25 billion that is fully committed to be raised through a new credit facility and the issuance of debt securities.

According to Zebra's chief executive: "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." He comtinued, "The Enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners."

Commenting on the deal, Greg Brown, Motorola Solutions chairman and chief executive, said: "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."

Morgan Stanley is serving as financial adviser to Zebra and is providing a fully underwritten financing commitment for the debt component of the transaction. Kirkland & Ellis LLP is serving as legal advisor to Zebra.