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What Motorola’s Acquisition of Airwave Has in Store

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Motorola completes acquisition of Airwave

In February 2016, Motorola Solutions (MSI) announced that it has completed the acquisition of Airwave, which is the largest operator of public safety networks in the world. Greg Brown, Chairman and CEO of Motorola, stated that “the acquisition of Airwave enables us to significantly grow our managed and support services business and reflects our commitment to the public safety users in Great Britain.”

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Notably, Brown added that “the combination of our years of experience as a trusted global leader in mission-critical communications and Airwave’s proven service delivery platform will provide Great Britain with innovative emergency services technology that enhances public safety today and into the future.”

What Motorola's Acquisition of Airwave Has in Store

Airwave has significant managed services infrastructure and operational assets that should drive future growth opportunities in this space for Motorola. Specifically, the addition of Airwave should increase Motorola’s revenue streams by 50%. In addition, the acquisition also adds geographic diversification and delivers another source of robust free cash flow.

Acquisition details

Motorola purchased Airwave on a debt-free basis, with a net cash payment of ~$1 billion. Also, a deferred cash payment of $90 million will be made in November 2018.

Motorola accounts for 8.4% of the iShares North American Tech-Multimedia Networking ETF (IGN). Other top holdings of this ETF include Harris Corporation (HRS), Qualcomm (QCOM), and Cisco (CSCO), which make up 9%, 8.7%, and 8.6%, respectively, of the ETF.

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