Zebra to Buy Motorola Solutions' Enterprise Business

Zebra Technologies Corp. on Tuesday said it has agreed to buy Motorola Solutions Inc.'s enterprise business for $3.45 billion in cash.

The deal represents a large expansion for Zebra as the barcode-printing and asset-tracking company looks to strengthen its presence in retail, logistics, transportation and manufacturing, while broadening its geographic reach.

"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 Chief Executive Anders Gustafsson said. "The enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners."

Motorola Solutions had pro forma revenue of $2.5 billion last year, while Zebra had $1 billion in sales, the companies said. Zebra also expects to add about 4,500 employees after the deal is completed.

Motorola Solutions became a stand-alone business in 2011 after splitting from Motorola Mobility Inc., which was later bought by Google Inc. for $12.5 billion. The company will now focus more on its government and public safety communications operations, it said.

"This transaction will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers," Motorola Solutions Chairman and CEO Greg Brown said. "Upon closing of the transaction, we intend to return the proceeds to our shareholders in a timely fashion."

Motorola Solutions separately said it lowered its revenue forecast for the first quarter because of soft demand in its North American government business, along with enterprise sales that came in under expectations. The company now sees a top line of about $1.8 billion, down about $500 million from the low end of its previous guidance.

Zebra raised its guidance for the first quarter, saying it expects per-share profit of 88 cents to 91 cents, excluding nine cents a share in acquisition expenses, and $287 million to $289 million in revenue. The company had previously projected a range of 77 cents a share to 87 cents a share in earnings and $276 million to $286 million in revenue.

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