Emerson to Acquire Motorola’s Embedded Communications Computing Business
Emerson (NYSE: EMR) and Motorola, Inc. (NYSE: MOT) today announced that the two companies have entered into a definitive agreement under which Emerson will acquire Motorola’s Embedded Communications Computing (ECC) business for $350 million in cash. Motorola’s ECC business, which had 2006 revenue of approximately $520 million, will strengthen Emerson’s position in the $6 billion-and-growing merchant embedded computing industry. Upon completion of the transaction, Motorola’s ECC business will become part of Emerson Network Power. The transaction is expected to be completed by the end of the calendar year and is subject to customary closing conditions and regulatory approvals.
Motorola’s ECC business is a leading provider of embedded computing products and services to communication infrastructure and equipment manufacturers in telecommunications, medical imaging, defense and aerospace and industrial automation. Based in Tempe, Arizona, Motorola’s ECC business has approximately 1,100 employees. The business has driven open standards and pioneered technologies based upon them since it was formed in 1980.
For Emerson, the transaction enhances its ability to meet the embedded computing needs of customers in telecommunications and other industries. Motorola’s ECC business brings complementary advanced technology and leverages existing marquee customer relationships with Emerson Network Power’s embedded computing and embedded power businesses.
For Motorola, the transaction sharpens its focus on its core businesses and technologies and provides additional capital to drive further growth and enhance shareholder value.
“We are excited to add Motorola’s Embedded Communications Computing business to the Emerson portfolio of businesses,” said David N. Farr, chairman, chief executive officer and president, Emerson. “The combination of Motorola’s ECC business with the $100 million embedded computing business we acquired as part of Artesyn last year establishes Emerson as a leader in the embedded computing industry. Through this transaction, Emerson can provide greater capabilities to our customers as they adopt advanced new technologies and expand applications for their customers.”
“We are pleased to announce this transaction with Emerson,” said Ed Zander, chairman and chief executive officer, Motorola, Inc. “We regularly evaluate our Company’s portfolio to ensure alignment with our core vision and business strategies to enhance shareholder value. We believe that Emerson has the proven track record to continue to serve ECC’s customers with the same high quality and level of products and services. We have the highest regard for the talented and dedicated ECC employees and are confident they will be a welcome addition to the Emerson team.”
The primary purpose of embedded computing technology is to control machines or other computer systems and manipulate data. For example, in telecommunications, embedded computing consolidates, translates, routes and monitors voice, video and data information across multiple networks. Local and long distance wireline offices and wireless base stations depend on embedded computing technologies to operate at peak performance.
Emerson Network Power and Motorola ECC embedded computing technologies specifically feature industry standards known as Advanced Telecommunications Computing Architecture (AdvancedTCA) and Micro Telecommunications Computing Architecture (MicroTCA). These standards are being adopted by major telecom companies because they increase network capacity while lowering the total cost of ownership.
“Wireless adoption is driving long-term telecommunications market growth and broadband applications are reviving near-term wireline investment,” Farr said. “As we watch the telecom world quickly bring voice, video and data together for its customers, we believe the addition of the Motorola ECC business significantly strengthens our position for growth.”
Because AdvancedTCA and MicroTCA have higher power allowance and more advanced power distribution — which permits more functionality and higher performance — the acquisition of Motorola’s ECC business also complements Emerson’s existing strengths in embedded power and advanced power conversion. These industry standards apply not only to telecommunications, but to other markets as well, including industrial automation and medical imaging sectors.
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