(Reuters) - Motorola Solutions Inc’s second-largest shareholder, Orbis Investment Management Ltd, said it would support a sale if a “full and fair” offer was made for the company that makes walkie-talkies and two-way radios.
A $1 billion investment from Silver Lake – one of the biggest ever by the private equity firm – on Wednesday has revived speculation that Motorola Solutions could be taken private.
The company’s cash pile of $3.11 billion, as of July 4, could be an attractive asset for a private equity firm, analysts and investors said.
“If there is (a) party out there that would like to acquire it in full, we would be in support of that, assuming that it is at a full and fair price,” said Adam Karr, managing director of Orbis, which holds a 7.8 percent stake in Motorola Solutions.
Karr told Reuters he would support a sale to either a private equity firm or a strategic buyer. Motorola Solutions has a market value of about $13 billion.
Gregory Brown, Motorola Solutions’ chief executive, however said the company was not thinking of going private and would continue to focus on growth.
Bloomberg reported earlier this year that Motorola Solutions had shopped itself around but failed to find a buyer.
“Within the next 5 years, do I think Motorola Solutions will be sold? I’d give that an at least 50 percent chance, if not higher,” Northcoast Research analyst Keith Housum said.
Housum said the buyer would most likely be a private equity firm.
Motorola Solutions is focusing on its faster-growing services business, which includes video monitoring and data analytics, as sales of its two-way radios stagnate.
The company said it plans to use Silver Lake’s funds for acquisitions to boost the services business and to buy back stock.
Silver Lake was part of a management-led team that took Dell Inc private in 2013 and was part of a consortium that acquired financial software maker SunGard in 2005.
The private equity firm has also invested in many technology companies including Chinese e-commerce giant Alibaba Group Holding Ltd, chipmaker Avago Technologies Ltd and web-hosting company GoDaddy Inc.
Motorola Solutions’ shares, which rose as much as 8 percent on Wednesday, had fallen 10 percent this year up to Tuesday’s close. In contrast, the S&P 500 Communications Equipment index has dropped 5 percent in the same period.
Additional reporting by Anya George Tharakan in Bengaluru; Editing by Sayantani Ghosh