Motorola Solutions (a current holding of ours) announced this morning they would be selling their Enterprise unit to Zebra Technologies for $3.45 billion. With EBITDA of $284 million last year, Zebra is paying about 12.1x, a whole lot less than what Motorola has spent in putting together a division that has just failed to meet high expectations.

Just how high were expectations? Motorola essentially bought its way into the Enterprise market with their acquisition of Symbol Technologies at the end of 2006, paying $3.9 billion for about $170 million of adjusted EBITDA. That's a ridiculous 23x multiple. Then the company acquired Psion PLC in 2012 for $200 million. Add in a few hundred million of capex and Motorola has spent about $4.3 billion over the last seven years putting together a corporate division they are now selling for $3.45 billion.

Talk about a waste of time and money.

Anyways, I think getting rid of the Enterprise unit will be a good thing as Motorola will have higher margins and will have more cash to return to shareholders.


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