According to a statement posted today, Zebra Technologies Corp. managed to reach an agreement with Motorola Solutions Inc. over the acquisition of Motorolas enterprise unit in a deal estimated to 3.45 billion dollars. The deal is expected to be finalized by the end of 2014.
Zebra revealed on Tuesday that the company will finance the purchase with about 200 million dollars of cash on hand, while the remaining 3.25 billion dollars are intended to be raised through a new credit facility and debt securities sales by the company. The financial adviser of Zebra is Morgan Stanley, while Motorola Solutions is being advised by Goldman Sachs and JPMorgan Chase & Co.
Mr. Anders Gustafsson, who is the Chief Executive Officer of Zebra Technologies Corp. said in the statement, which was cited by the Wall Street Journal: “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. The enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners.”
The market value of Zebra Technologies Corp. currently amounts to 3.44 billion dollars. Finalizing the deal with Motorola Solutions and acquiring its enterprise division will translate into a considerable expansion for Zebra, which is also focused on improving its presence in retail, logistics, transportation and manufacturing segments.
The two companies would have had a combined pro-forma revenue of 3.5 billion dollars in 2013, according to the statement. Zebra Technologies Corp. shared that it expects to hire 4 500 new workers after the deal is finalized. According to the last years filings of the two companies, the group after the acquisition is expected to have about 7 000 employees. The company is also forecast to generate about 3.5-billion-dollar annual sales.
As reported by the Wall Street Journal, the current Chairman and CEO of Motorola Solutions Inc. – Mr. Greg Brown – also commented the deal saying: “This transaction will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers. Upon closing of the transaction, we intend to return the proceeds to our shareholders in a timely fashion.”
Zebra Technologies Corp. closed at $68.28 per share on Monday, adding 2.23% for the day and marking a one-year change of +51.67%. According to the information published on CNN Money, the 4 analysts offering 12-month price forecasts for Zebra Technologies Corp. have a median target of 72.50, with a high estimate of 95.00 and a low estimate of 70.00. The median estimate represents a +6.18% increase from the last price of 68.28.
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