Motorola Solutions (MSI) Possibly Looking For Buyer

Shares of Motorola Solutions Inc. (MSI) were trading at $67.51 per share, up +2.85 or +4.41 percent in Friday's premarket after news late last week and early this morning that the company was looking for potential buyers. Motorola Solutions stock closed at $64.66 per share, up +0.66 or +1.03 percent in Friday's regular trading session.

Schaumberg, Illinois based Motorola Solutions Inc. is the last division of Motorola Inc. that was founded in 1928 as Galvin Manufacturing Corp. The company originally produced car radios that led to the company manufacturing public safety radios and eventually to the production of walkie-talkies and cell phones.
Motorola Inc. was a pioneer in mobile phones, making its first handheld device in the early 1980s. Motorola Solutions succeeded Motorola Inc. following the spin-off of Motorola Mobility in 2011. The company was originally the Government, Public Safety and Enterprise Mobility Solutions division of the original Motorola Inc., selling its network division to Nokia Siemens Networks (NOK) in April of 2011. Motorola Solutions Inc. currently manufactures radio equipment for emergency workers and scanners for the retail segment.

According to sources familiar with the matter, Motorola Solutions has been actively seeking a buyer for several months. The sources affirm that Motorola Solutions is working with financial advisors seeking a buyer; however a transaction is not currently forthcoming. Spokesmen for the company declined to comment on speculation and rumors.

Motorola Solutions Inc. reported fourth quarter earnings last Wednesday, which showed flat sales from one year ago; nevertheless, North American sales increased four percent driven by record product sales. Non-GAAP earnings came to $1.25. Greg Brown, chairman and CEO of Motorola Solutions said "Our fourth-quarter results demonstrate a solid finish to a transformational year, the business continues to show signs of improvement, driven by growth in North America and significantly higher backlog. Our ongoing progress to simplify our organization and rationalize our cost structure will further position us for long-term success.

Despite its fourth quarter results, full year 2014 non-GAAP earnings fell -33 percent from continuing operations as sales declined six percent. In addition, the company's outlook for 2015 is forecasting revenues to be flat or slightly lower.

After purchasing $1.17 billion of its own shares from activist investor, Carl Icahn, the company's existing major shareholders include Blackrock Inc. (BLK) and Value Act Capital Management, which could be potential buyers of Motorola Solutions. Other companies that could have an interest are defense contractors, Honeywell International Inc. (HON) and General Dynamics Corp (GD), which would generate more government business for the companies from the purchase.

Motorola Solutions stock is higher this morning, but was up as much as eight percent in Friday's afterhours after the news originally broke. While a deal has not yet been announced, Motorola Solutions stock will probably carry a premium to its closing price on Friday, which, depending on the transaction could be substantial.

Other News About MSI

Motorola Solutions revenue, forecast beat on strong N. America sales
Company says it expects North American sales to continue to grow.

Motorola Solutions Invests in SceneDoc, Maker of 'Public Safety's Trusted Digital Notebook'
Company invests in Canadian software safety provider.

Other Stocks in the News

McDonald's Jan. global same-store sales fall 1.8%, hurt by Asia
Sales in the Asia/Pacific region declined -12.9 percent.

GM extends top lawyer's stay as search for successor still ongoing
GM will extend the tenure of top lawyer Michael Milliklin while it searches for other candidates.

Published on Feb 9, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

Posted in ...