SymbolDot to beat a dead dog...but
Motorola acquiring Symbol Technologies for $15 a share
Marketwatch - September 19, 2006 9:27 AM ET
WASHINGTON (MarketWatch) -- Motorola Inc. said Tuesday it has agreed to pay $3.9 billion in cash to acquire Symbol Technologies Inc., a developer of business-oriented wireless products such as handheld barcode scanners.
Under the deal, Motorola (MOT) plans to buy all outstanding Symbol shares for $15 apiece. The transaction pairing two well-known names in wireless technology has long been the source of rumors.
Symbol's shares ended Monday's trading at $14.67, up 15.4% as speculation about a deal heated up following a weekend Wall Street Journal report. Motorola rose 10 cents to close at $24.95.
Symbol (SBL) is a market leader in mobile-data computing and radio-frequency identification, or RFID, technology. Symbol is also known for its role in spearheading the development of barcode-scanning technology, which is especially popular in retail stores.
"Everything is going digital, and everything digital is going mobile," Motorola Chief Executive Ed Zander said during a conference call to explain the biggest acquisition since he took over the company in 2004. "It's buying the future."
During his tenure, Zander has ceaselessly promoted the idea of wireless or mobile technology.
While the company has a strong presence in the consumer market with its popular wireless handsets such as the RAZR line, Schaumburg, Ill.-based Motorola has also sought to improve its position in the corporate enterprise market with an array of devices and wireless technologies to transmit data from one point to another.
In 2005, Symbol generated net income of $32.3 million on a 1.9% increase in revenue to $1.8 billion. While Wall Street analysts applauded the deal, they said the challenge for Motorola is to boost sales from Symbol's operations.
Company executives said they believe they can achieve that goal by combining Symbol with Motorola's mobile-technology business.
In particular, the Symbol deal would allow Motorola to sell handheld computers with barcode readers that could operate over the iDen network used by the Nextel service of Sprint Nextel Corp. (S) as well as other mobile-transmission standards such as "WiFi" and "WiMax." Motorola sells networking gear for all three of these technologies.
The deal's expected to be completed by early in 2007, pending regulatory clearance and the approval of Symbol stockholders. Motorola will use Symbol's Holtsville, N.Y., headquarters as the core of its operations geared toward addressing the communications requirements of business customers.
Motorola said the deal will contribute to earnings per share on an adjusted basis in the first year following closing. The company also said it will take certain unspecified non-cash charges related to acquired intangible assets and other one-time costs.
Acquiring Symbol won't alter the pace of Motorola's share-repurchase activity, the company said. Motorola had ample cash available with more than $14 billion in cash and short-term investments as of July 1.
Motorola's last major acquisition was six years ago, when the company acquired General Instrument Corp.
Do you think Motorola bought Symbol for there bar code business?? I think not...RFID and there clints.
We are in a very good position to take advantage of this technology.