Motorola Solutions Inc. (MSI) Has Failed to Find a Buyer

By Alex Sherman Apr 2, 2015, 1:31 PM 

Motorola Solutions Inc. (MSI) has failed to find a buyer after seeking to drum up interest from private-equity funds and large industrial companies, people with knowledge of the matter said.

The maker of two-way radios and other communications equipment has proved too large a target for any single buyout fund, one of the people said. Motorola fell 3.6 percent to $64.24 as of 2:16 p.m. in New York trading, giving it a market value of about $13.6 billion.

Funds are finding it difficult to obtain financing for large deals amid government scrutiny, and so-called club deals among teams of firms have largely disappeared.

Motorola also approached strategic buyers including Honeywell International Inc. and Tyco International Plc, without gaining any traction, another person said. Some strategic buyers were concerned that Motorola’s technology may become obsolete too quickly to justify a large purchase price, this person said.

Bloomberg News reported in early February that Motorola had hired investment banks to find a buyer. At that point a sale process had already been under way for months.

Spokesmen for Motorola, Honeywell and Tyco declined to comment.

Icahn Breakup

Based in Schaumburg, Illinois, Motorola makes radio equipment for emergency workers. Per-share profit excluding some items tumbled 45 percent last year, according to data compiled by Bloomberg, and the company has projected that 2015 revenue will be unchanged to slightly lower.

Motorola Solutions is the product of a 2011 breakup of Motorola Inc., which came after investors led by billionaire Carl Icahn sought to shake up the company’s performance. The mobile-phone unit that was spun off as Motorola Mobility Holdings Inc. was sold to Google Inc., which then sold the handset business to Lenovo Group Ltd. in 2014.

The company has continued to divest units, selling its enterprise business — which makes bar-code scanning and radio-frequency identification technology — to Zebra Technologies Corp. for about $3.5 billion last year.

The sale of that business is one reason that Honeywell is unlikely to be interested in Motorola, according to Shannon O’Callaghan, an analyst with UBS Group AG.

“The piece of Motorola that overlaps with them was sold to Zebra, so if they were going to be interested in Motorola, that piece is gone,” O’Callaghan said last month.

Bloomberg News

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