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Zebra Buys Motorola Solutions' Enterprise Business
With the purchase of a major supplier of fixed and handheld RFID readers, Zebra will now be one of the world's largest providers of RFID hardware, including printers, encoders and readers, as well as software.
Apr 15, 2014—
RFID, bar-coding and real-time location system (RTLS) technology company Zebra Technologies is acquiring Motorola Solutions' enterprise business, with completion of the transaction expected to take place by the end of this year. With the $3.45 billion sale (funded by a combination of $200 million in available cash and $3.25 billion in new debt), Zebra—headquartered in Lincolnshire, Ill.—will gain Motorola Solutions' RFID hardware business, as well as its mobile-computing, bar-coding, card-printing and cloud-based device-management technologies. Zebra will then operate the combined businesses, adding Motorola Solutions' technology and personnel to its own, under the Zebra name.
The acquisition will more than double Zebra's size, the company reports. In 2013, the firm reported $1 billion in sales revenue, compared with approximately $2.5 billion in sales revenue for Motorola Solution's enterprise business division. Zebra employs 2,700 workers worldwide, but will add 4,500 employees from Motorola Solutions. The purchase includes 3,700 issued and pending patents from Motorola Solutions.
In 2007, Motorola Solutions acquired Symbol Technologies (see Motorola Acquiring Symbol), which sold handheld ultrahigh-frequency (UHF) RFID readers and bar-code scanners. Prior to that acquisition, Gerskovich says, Symbol and Zebra were each accustomed to providing complementary pieces of an RFID solution to the same customers, such as hospitals, retailers and logistics firms. "We are the leader in RFID printers and encoders," he states, while Symbol "was the leader in RFID readers."
It makes sense for Zebra and Motorola to combine their product offerings into a single company, Gerskovich says, adding that this was something Zebra had been considering for some time. Because Zebra was acquiring a business larger than itself, it needed to plan such a maneuver for a time when interest rates were low (since the firm is financing most of the purchase price) and when the market would be supportive of acquisitions—which, he says, it currently is. Changes in the needs of Zebra's customers, Gerskovich adds, was further incentive to make the acquisition now. One change for end users is the growing use of mobile workers (who would need to use RFID or other automatic-identification methods to send data about their work back to management). In addition, companies are increasingly relying on data acquired and stored on cloud-based servers to manage information not just about individuals but things, with their locations and conditions provided via sensor data transmitted via RFID.
With the growth in cloud-based data management, Zebra has recently opened its Zatar unit, which offers an application to enable the tracking of printers, RFID readers and PDAs, as well as other devices, as part of the Internet of Things process of tracking goods online (see Zebra Launches Zatar 'Internet of Things' Service for RFID Readers, Networked Devices). The Motorola acquisition will benefit from the Zatar application as well, Gerskovich reports, since the readers and other Motorola Solutions hardware can be managed with the app.
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