Motorola to buy Symbol Tech for $3.9B
Cell phone manufacturer agrees to cash deal for maker of bar code scanners, handheld computers and wireless networking equipment.
NEW YORK (CNNMoney.com) -- Motorola has agreed to pay $3.9 billion in cash to acquire Symbol Technologies, the companies announced Tuesday.
Motorola (Charts) will pay $15 a share for Symbol Technologies, the company best known for bar code scanning systems. The firm also makes handheld computers, wireless networking equipment and radio frequency identification systems.
The purchase price represents only a 2.2 percent premium from the Monday closing price. But shares of Symbol Technologies (Charts) jumped 15.4 percent in trading Monday after a report of the possible deal in the Saturday edition of The Wall Street Journal.
Motorola said the acquisition should add to its earnings per share, in the first year following closing, excluding certain non-cash charges. It is expected to close in late 2006 or early 2007, after customary regulatory approval and the approval of Symbol's stockholders.
Shares of Symbol were trading more than 200 percent above the current purchase price back in March 2000, before the Internet stock bubble burst.
The company then suffered through a series of losses, results restatements and accounting scandals, along with turmoil in its leadership ranks.
It lost two chief executives in the face of questions about its accounting practices, with former CEO Tomo Razmilovic fleeing the country after he was charged with accounting fraud in 2004. He went first to his native Croatia, then reportedly to Sweden, where he continues to avoid prosecution.
The CEO credited with righting the ship, William Nuti, left the company in August 2005 to head competitor NCR (Charts), taking the spot that had been vacated when Mark Hurd left that company to head Hewlett-Packard (Charts).
Symbol reported its lowest earnings excluding special items in three years in 2005, although its earnings were up from year-earlier levels in the second quarter, matching the forecasts of analysts surveyed by earnings tracker First Call.