Motorola To Acquire Symbol
Motorola Inc. said Tuesday it will acquire Symbol Technologies Inc. for about $3.9 billion in a deal that expands the world's second-largest cell phone maker's presence in the market for business-oriented mobile devices.
The deal for Symbol, which makes portable bar-code scanners and customized handheld computers, is expected to close in late 2006 or early 2007, pending regulator clearance and approval by Symbol shareholders, company officials said.
"This is a company we've been looking at for some time," Motorola Chairman and CEO Ed Zander said in a conference call from Symbol's headquarters in Holtsville, N.Y. "We really had our hearts set on adding lots of critical mass and critical size inside the enterprise area and today we do that."
Schaumburg, Ill.-based Motorola said it would pay $15 per Symbol share. That's 18 percent higher than Symbol's closing price of $12.71 on Friday, before weekend news reports of an impending deal helped boost the stock to $14.67 on Monday.
Symbol also produces mobile devices for rugged business environments, as well as equipment based on the emerging wireless technology known as RFID, or radio frequency identification, which is used for inventory tracking and other purposes.
Motorola intends for Symbol to become the "cornerstone" of the company's enterprise mobility business, said Symbol president and CEO Sal Iannuzzi. Symbol has about 5,200 workers, and in 2005 reported earnings of $32.3 million on sales of $1.77 billion.
"This transaction is about growth," Iannuzzi said. "We are confident that Symbol's products and personnel will prove to be a valuable asset to Motorola and will be the cornerstone of Motorola's enterprise mobility strategy going forward."
The deal is Motorola's largest since its $17 billion acquisition of cable TV box-maker General Instrument Corp. in 2000.
The merger won't affect Motorola's stock repurchase program, company officials said. In July Motorola announced it would spend $1.2 billion to buy back shares ahead of schedule and authorized a new $4.5 billion repurchase plan good for the next three years. The move allocated a sizable portion of the company's large cash reserves to its stock.
Motorola, second in the global handset market behind Finland's Nokia Corp., expects the acquisition to add to earnings per share in the first year following closing, excluding certain non-cash charges.