After listening to Motorola Solutions’ 2015 Financial Analyst presentation this morning and thinking about the actions the company has completed in the past year, I am even more convinced the company is ripe for a takeover by private equity or by a larger company in the defense industry. Even if a takeover does not materialize, Motorola is in an excellent position to continue delivering good returns to public shareholders. Here’s an outline of my thoughts.
Motorola Solutions (a current holding of ours) announced this morning they would be selling their Enterprise unit to Zebra Technologies for $3.45 billion. With EBITDA of $284 million last year, Zebra is paying about 12.1x, a whole lot less than what Motorola has spent in putting together a division that has just failed to meet high expectations.
BeyondProxy, a publisher of investment research for the professional value investing community, recently added Doug Ott to its exclusive list of contributors for their website. The first contribution was Doug's thoughts on Motorola Solutions (MSI), a company in which Andvari clients are currently invested. You may read the post on BeyondProxy by clicking here.
Motorola Solutions (MSI) reported results and guidance that disappointed the market. The stock has been down 8%–10% today.
However, I think this overreaction provides an potentially attractive entry point for an investor, especially in light of the fact the company is under-leveraged and continues to return large amounts of capital to shareholders in the forms of dividends and share repurchases.
©Andvari Associates 2021
All Rights Reserved