Silver Lake bets $1 billion on Motorola Solutions

Wed Aug 5, 2015 9:58am EDT
 
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By Devika Krishna Kumar

(Reuters) - Motorola Solutions Inc MSI.N said private equity firm Silver Lake would invest $1 billion in the maker of walkie-talkies and radio systems as it looks to boost growth in its services business, which includes video monitoring and data analytics.

Motorola Solutions, whose shares were up 6 percent in early trading on Wednesday, also said it planned a $2 billion buyback.

The investment is one of the largest ever by Silver Lake, which led a $24.9 billion deal to take Dell Inc private in 2013.

The private equity firm will buy $1 billion of convertible senior notes due 2020 with an initial conversion price of $68.50 per share, Motorola Solutions said.

Silver Lake will also get two board seats when the deal closes. The board currently has eight members.

Motorola Solutions, which had a market value of about $12.6 billion as of Tuesday's close, said it expected the investment to boost its business that includes video monitoring, data analytics and content management for "smart policing".

The business accounted for 3 percent net sales of the company's services unit, which in turn represented 35 percent of overall net sales in 2014.

"It shows Silver Lake does value MSI as a great strategic asset, not the ex-growth declining assets some observers described recently," Bernstein analyst Pierre Ferragu said.   Continued...