Motorola Agrees to Buy U.K.'s Airwave for $1.2 Billionby
Airwave's communications network serves U.K. first responders
Network technology said to be obsolete, in `dying business'
Motorola Solutions Inc. agreed to buy Airwave Solutions Ltd., a U.K. communication services provider, for about $1.2 billion to help build out its software and services business.
Motorola expects to make a net cash payment of 700 million pounds ($1 billion) at closing, based on purchase price adjustments and cash in the business, according to a statement Thursday. A deferred cash payment of 64 million pounds will be made in November 2018, the Schaumburg, Illinois-based company said.
Airwave, based in Slough, England, provides a communications network for the U.K.’s emergency fire, police and ambulance services, according to its website. Yet that network’s technology “could be obsolete in the next 10 years assuming U.K. wants to move” to newer wireless technology, said Keith Housum, an analyst at Northcoast Research Holdings, in an interview. Airwave’s is a “dying business worldwide,” added Roger Entner, an analyst at Recon Analytics LLC.
In August, Motorola Solutions announced a $1 billion investment from Silver Lake Management, saying the private-equity firm would help it with strategic partnerships and acquisitions. The communications equipment maker failed to find a buyer earlier this year after trying to drum up interest from private-equity funds and large industrial companies, people with knowledge of the matter said in April.
Airwave was controlled by Macquarie Group Ltd., whose funds agreed to buy Airwave in 2007 for 1.9 billion pounds.
“With 99 percent coverage of Great Britain’s landmass, Airwave offers a proven service delivery platform for us to build on as we continue providing innovative, leading mission-critical communications solutions for our customers today and into the future,” Kurt Ebenhoch, a Motorola Solutions spokesman, said in an e-mailed statement Thursday.
The Airwave network runs on TETRA technology, a preferred standard for mission-critical communications in Europe, Ebenhoch said. “New networks with this technology continue to be deployed, most recently in Norway," he said.
North American buyers have spent about $96 billion acquiring U.K. companies this year as they continue to seek growth outside their home markets, according to data compiled by Bloomberg.
Motorola Solutions was formed following the 2011 separation of Motorola Inc. into two companies, one focused on mobile devices and the other -- Motorola Solutions -- on communications equipment for corporate and government clients. After selling parts of its businesses, the company has been providing products and services for the government and public sectors.
Motorola Solutions rose 3.4 percent to $73.50 in after-market trading. The shares have climbed 6 percent this year.