Motorola Solutions exploring possible sale

New York

MOTOROLA Solutions Inc, the maker of two-way radios and other communications equipment, is exploring a possible sale, people familiar with the matter said.

Buyers of the 87-year-old company could include private- equity firms and companies including Raytheon Co, Honeywell International Inc and General Dynamics Corp, said one of the people, asking not to be named because the information is confidential. The Schaumburg, Illinois-based company has a market value of about US$15.6 billion.

Motorola Solutions is what's left of Motorola Inc after the company in 2011 split off its mobile-phone unit amid pressure from billionaire Carl Icahn. The mobile-phone unit that was spun off as Motorola Mobility Holdings Inc was sold to Google Inc, which then sold pieces of the business to Lenovo Group Ltd in 2014.

The company that remained, which makes radio equipment to emergency workers and scanning devices for retailers, has struggled with earnings performance, with 2014 non-GAAP earnings per share from continuing operations dropping 33 per cent as sales declined 6 per cent. The outlook for this year remains stagnant - the company projects 2015 revenue will be flat to slightly lower.

At their closing price of US$64.66 on Friday, the shares have gained 2 per cent in the past year. The stock jumped as much as 8.3 per cent to US$70 in afterhours trading on Friday.

Founded in 1928 as the Galvin Manufacturing Corp, Motorola's first product was a device that allowed battery- powered radios to run on household electricity, according to its Website. Motorola Solutions also offers technology services to clients including Prince George's County in Maryland and the Las Vegas Metropolitan Police Department.

The company is working with financial advisers as it seeks a buyer, the people said. A transaction isn't imminent, though a sale process has been under way for several months, a source said.

Kurt Ebenhoch, a spokesman for Motorola Solutions, said the company doesn't comment on rumours and speculation.

Motorola Inc announced a plan to spin off its mobile-phone business in March 2008 amid market share losses and pressure from Mr Icahn. The company then delayed the move amid the recession before completing the split in January 2011.

The deal for Google's US$12.4 billion purchase of Motorola Mobility, announced just months after the split, marked an end as an independent company for a company that helped pioneer mobile phones and introduced its first consumer handset in the early 1980s.

Google, after subsequently selling off the set-top business, announced early last year it would sell the remains of Motorola Mobility - excluding the majority of the patents - to Chinese PC Maker Lenovo.

In February 2012, Motorola Solutions bought US$1.17 billion of its shares from Mr Icahn, and said his representative on its board would step down. Existing shareholders include ValueAct Capital Management and Blackrock Inc.

Raytheon in November acquired Blackbird Technologies, a surveillance and cyber security company, for US$420 million to bolster its intelligence business. In a Jan 29 interview, Raytheon chief financial officer Dave Wajsgras said the Waltham, Massachusetts-based company will pursue other deals, with an emphasis on expanding its cyber capabilities and electronic warfare business. "We will continue to focus on technology-based acquisitions in areas that we see we can expand our markets and build off of our technology foundation," he said.

Pamela Erickson, a spokeswoman for Raytheon, didn't immediately comment, while Robert Ferris, a spokesman for Honeywell, declined to comment. Lucy Ryan, a spokeswoman for General Dynamics, couldn't be reached outside of normal business hours. BLOOMBERG