Dive Brief:
- Motorola Solutions is set to acquire defense radio maker Silvus Technologies for $4.4 billion, the Chicago-based technology, communications and security company said Wednesday.
- The all-cash agreement, expected to close by the end of 2025, would expand Motorola’s portfolio to include technologies that address safety, security and defense use cases for autonomous systems and secure high-bandwidth communications.
- Silvus, based in Los Angeles, could also receive an additional payout of $600 million based on its business performance through 2027 and 2028 as part of the deal.
Dive Insight:
Motorola, which spun off and sold its cell phone business to Google in 2012, pivoted to focus on public safety technology and has reaped strong returns over the past decade.
The company recently reported first quarter sales of $2.5 billion, up 6% from last year. That marked sizable growth from Q1 2015, when Motorola reported sales of $1.2 billion. Additionally, earnings per share has ballooned from 40 cents to $2.53 over the 10-year period.
However, tariffs are driving up costs and challenging the company. During an earnings call May 1, Motorola EVP and CFO Jason Winkler said the company is expecting a tariffs impact of close to $100 million this year. The company is implementing supply chain adjustments and cost-savings measures to mitigate the effects of the dynamic trade backdrop, he said.
Motorola contracts with manufacturers around the world for most of its products, including facilities in Mexico, Malaysia and Canada, according to its annual investor filing. It also owns or leases operations in Illinois, Florida and Texas.
Motorola’s success over the years has stemmed largely from focusing on rugged, weather-proof technologies used across industries, such as radios and video surveillance systems, as well command center and support services software.
Acquiring Silvus would expand Motorola’s portfolio to include devices with mobile ad-hoc network technology, also known as MANET, which can transmit data, audio and video without any pre-existing network infrastructure. The technology is currently used in military and law enforcement use cases.
“This acquisition underscores our unwavering conviction that technology is the bedrock for protecting communities, securing borders and defending against today’s ever evolving threats, whether in the air, on the ground or in the water,” Greg Brown, chairman and CEO of Motorola, said in a statement.
Silvus is on track to generate $475 million in revenue this year with an adjusted earnings margin of roughly 45%, according to Motorola’s investor presentation Wednesday. It could be accretive to Motorola’s earnings per share within the next 12 months.
Motorola is expecting rapid customer adoption with this move. Silvus’ devices use high-bandwidth, private, mobile mesh data networks and radio frequency sensing technologies for data transmission and communication, according to the presentation. They are different from competitors' offerings in that their anti-jam techniques can support high data throughput for a large number of nodes in congested environments.
The companies plan to combine their engineering teams and leverage Motorola’s size and scope to reach global customers. Silvus was previously owned by TJC LP, formerly known as The Jordan Company.
