Equity firms eye Motorola's STB unit

Motorola's apparent desire to sell off its set top box unit has sparked serious interest from major private equity firms.

This new development follows a report that emerged last month that Motorola was considering spinning off its STB and wireless networking equipment business--a unit that had $10.1 billion in sales in 2008--for $4 to $5 billion.

Now, a new Reuters report citing unnamed sources, says that Bain Capital, TPG Capital, Blackstone Group LP and Silver Lake Partners have put in bids for the unit. There's also speculation that fellow cable vendor Arris Group could have put in a bid for the unit, but sources argue that they would more likely do a joint bid with a private equity firm.

Although Silver Lake, Blackstone, TPG, KKR, Bain, Motorola and Arris would not comment on the situation, another source said that Motorola could possibly choose to just keep the unit.

One theory behind why Motorola might sell the STB division is that they are concerned that the STB will be replaced by other devices (gaming consoles and Internet-enabled TVs) that could stream movies and on-demand TV show episodes from the Internet.

"Maybe Motorola is looking at that and thinking eventually the business is going to shift away from the cable providers to a more retail model," said Charles Golvin, an analyst at Forrester Group. "I think there will be a range of different devices and things that connect to TVs to deliver content."

For more:
- Reuters has this article

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