“Motorola, which has said it wants to split into two separate companies, is exploring a three-way split instead in order to raise cash and pay down debt,” Saul Hansell and Michael J. de la Merced report for the New York Times.
Motorola “has hired JPMorgan Chase, Centerview Partners and Goldman Sachs to seek buyers for its division that manufactures set-top boxes for cable television companies and radios to go into cellphone transmission towers, according to people briefed on the matter,” Hansell and de la Merced report. “These people, who requested anonymity because they were not authorized to discuss the process, cautioned that it was still in its early stages and may not lead to a deal.”
Hansell and de la Merced report, “Last year, Motorola, based in Schaumburg, Ill., said it wanted to separate its struggling cellphone handset unit from the rest of the company, which includes a third business unit that sells two-way radios to businesses and government agencies.”
Full article here.
Eric Jhonsa writes for The Motley Fool, “With $2 billion in revenue and $199 million in operating income last quarter, Home & Networks Mobility is probably the most valuable piece of Motorola’s blemished empire.”
“The proceeds that Motorola would receive from the sale—The Wall Street Journal reported a $4.5 billion price tag—could allow the company to pay down its $3.9 billion in debt and prop up its sputtering mobile phone division, whose estimated 4.7% market share last quarter is a fraction of what it possessed a few years back,” Jhonsa writes. “It’s been suggested that afterward, maybe in 2011, Motorola would also divest itself of its Enterprise Mobility division—a profitable, stable business that makes secure two-way radios, bar code readers, and corporate Wi-Fi equipment, among other things. Motorola might also sell this division for cash, or, with its balance sheet in good shape, do a traditional spinoff/IPO for its shareholders.”
Jhonsa writes, “Either way, Motorola shareholders would be in much better shape than they are right now. Instead of the current mess, they’d be invested in one or two companies with healthy balance sheets, whose management teams weren’t distracted by unrelated businesses. It’s just a shame that Moto waited until the 21st century to take these steps.”
Full article here.
MacDailyNews Take: Just 30 months ago, in May 2007, Motorola’s then-Chairman and then-CEO Ed Zander boasted that his company was ready for competition from Apple’s iPhone, due out the following month. “How do you deal with that?” Zander was asked of the iPhone that Steve Jobs had unveiled in January. Zander quickly retorted, “How do they deal with us?”
[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]