With sales declining across all of its divisions and fears over the service provider community's movement towards IP-based video, Motorola may sell off its home-and-networks unit that sells cable, home networking and related last mile equipment. A Wall Street Journal article, citing people familiar with the matter, reports that Motorola's home-and-networks division could possibly be sold for $4 to $5 billion.
Although no initial bids have been brought to the table, the idea of selling the home-and-networks unit came to light when two private-equity funds, TPG and Silver Lake Partners, approached Motorola about acquiring the division. What's making the home and networks unit attractive to possible suitors is its profitable, fetching $10.1 billion in revenues last year.
In addition to the TPG and Silver Lake Partners, other potential suitors for the unit include Samsung Electronics Co, Huawei, Ericsson and Pace PLC. However, none of these companies would comment.
Motorola made a name for itself in the cable industry when it bought the former General Instrument Corp. for about $17 billion in 2000. Subsequently, Motorola expanded its cable and broadband war-chest with the respective acquisitions of the former River Delta Networks and Quantum Bridge.
One analyst said that selling off the cable unit makes sense since it does not share any 'synergies' with its mobile handset and mobile enterprise units. "It's a stretch to say there would be true synergies if they stayed together," said John Jackson, an analyst for market researcher CCS Insight.
For more:
- Wall Street Journal has this article
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