Sun, Apr 05, 2015 - Page 13 News List

Motorola Solutions too big for single buyout fund: source

Bloomberg

Motorola Solutions Inc 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, asking not to be identified discussing private information.

Motorola shares fell 6.2 percent to US$62.51 in New York trading on Thursday, giving it a market value of about US$13.2 billion.

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

Motorola has struggled recently, with per-share profit excluding some items tumbling 45 percent last year, and sales this year projected to be unchanged to slightly lower.

The company might be able to find interest from wireless carriers that want to deepen relationships with emergency service providers who need reliable and constant access to communications networks, Cleveland, Ohio-based Northcoast Research analyst Keith Housum said.

Another option for Motorola — a share buyback — would only increase debt and make it less attractive to private-equity firms, he said.

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

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