Analyst: Motorola Solutions sale possible, buyer needs 'deep pockets'
Schaumburg-based Motorola Solutions Inc. has been the subject of potential sale rumors for a while among investors, but a potential buyer will need “deep pockets,” an analyst said Monday.
“It's been in the back of my mind for a while that some sort of deal could make sense,” said Morningstar analyst Pete Wahlstrom. “Anything's possible. But the company has a market cap of $16.3 billion, so someone who comes in will need deep pockets to buy it.”
Motorola Solutions, the target of media reports in recent days citing unnamed sources about a potential sale, likely could fetch $17 billion or more. One of its main attractions is its global domination for public safety radio handset, infrastructure, software and services. It also has several long-term contracts with those customers, which is appealing and could continue under a new owner, Wahlstrom said.
Whatever shakes out from the rumor mills, Motorola Solutions intends to host an analyst day on Feb. 17, a common practice among publicly traded companies. The forum is used to discuss its products and strategies with top Wall Street analysts. The company unlikely would use the forum to make a major announcement of any potential buyout, Wahlstrom said.
“They'll likely talk more about how they'll work more efficiently or other matters related to its growth,” he said.
Bloomberg News reported in recent days that potential buyers could include private-equity firms, which usually whittles down costs with a plan to resell the company again later. Other companies that could have an interest in Motorola Solutions include Raytheon Co., Honeywell International Inc. and General Dynamics Corp.
This news comes at a time when the legendary Motorola has undergone massive transitions since the dot-com bust, where it shed tens of thousands of jobs worldwide and then split into two publicly traded companies in 2011. The sister company, Motorola Mobility, later was acquired by Google and then Lenovo, and moved its headquarters into downtown Chicago. Now Motorola Solutions, which also has offices in downtown Chicago, has been on the firing line of rumors.
Such reports have concerned Schaumburg village officials, especially on what could happen to the campus off Meacham, how many employees would be housed there, and how all of this would affect economic development and tax income.
“We still haven't heard anything directly from the company,” said Schaumburg President Al Larson.
Motorola Solutions spokesman Kurt Ebenhoch said he would not “comment on rumors of speculation.”
“We greatly value the relationships we have with community officials and organizations in the many places where we operate, and we share information with them formally and informally as we are able,” Ebenhoch said. “With the exception of more formal meetings announced by the community, we don't disclose a schedule of our conversations.”