Zebra Technologies — the bar code and tracking company based in Lincolnshire, Illinois — has agreed to buy Motorola’s Enterprise scanner business for a whopping $3.45 billion in cash.
The move allows Motorola to focus on providing communications equipment for the military and local police and fire departments, according to Motorola Solutions CEO and chairman Greg Brown.
“This transaction will enable us to further sharpen our strategic focus on providing mission-critical solutions for our government and public safety customers,” Brown said in a news release. “Upon closing of the transaction, we intend to return the proceeds to our shareholders in a timely manner.”
Zebra Now Poised for Growth
Zebra, which had sales of just $1 billion in 2013, makes equipment for barcodes, enterprise printing, asset tracking, Internet of Things (IoT) solutions, and motion and location sensing. The purchase allows the company to expand its geographic reach and have a stronger combined platform of products with multiple growth opportunities, according to Zebra CEO Anders Gustafsson.
“The acquisition will transform Zebra into a leading provider of solutions that deliver greater intelligence and insights into our customers,” Gustaffson said. “The Enterprise business will generate significant value for our shareholders by driving further product innovation and deeper engagement with our customers and partners. It positions Zebra as a leading technology innovator, with the accelerating convergence of mobility, data analytics and cloud computing.”
The move allows Zebra to take the upper hand in the growing supply chain control industry by combining bar code labels and radio tags with the computers and scanners made by Motorola’s Enterprise division.
Enterprise, which also makes wireless local-are network devices, earned about $2.5 billion in revenues in 2013 and controls about 4,500 patents.
Motorola to Focus on Core Product Lines
Motorola has been divesting itself of its non-core businesses for the past several years so it can focus on is radio and communications lines. It is holding on to its iDen business, which makes wireless products and two-way radios.
The acquisition puts Zebra in the driver’s seat in the growing tracking business. As retailers and chains struggle to get their products to consumers faster and seamlessly, the ability to track and count items through a vast distribution network is essential.
Zebra already has some high profile clients using its devices, including Wal-Mart and Amazon. The company is responsible for the tracking printing half of all the drivers’ licenses in the US, as well as producing bar codes for patients’ hospital bracelets.
The company is running a pilot project with two NFL teams for a tagging device that helps coaches measure player performance on the field. And it has a contract with a ski resort in Vail, Colorado, to embed radio-enabled chips into its ski passes to authenticate them more easily.
Among the company’s futuristic products include a billboard that shows different ads to different people as they walk by, similar to a device featured in the 2002 science fiction film, “Minority Report”. The product was displayed at the National Retail Federation’s annual trade show in January.