Airwave Acquisition Drives Revenue for Motorola


Sep. 28 2016, Published 3:14 p.m. ET

Acquisition increases MSI’s revenue stream

A few months back, Motorola Solutions (MSI) announced that it had completed the acquisition of Airwave, the largest operator of public safety networks in the world. According to the CEO and Chairman of MSI, Greg Brown, this acquisition will enable Motorola to grow its managed and support services business significantly.

As the chart below shows, this acquisition is expected to be accretive to EPS (earnings per share) and FCF (free cash flow) per share in 2016. Revenues are expected to rise by $450 million in 2016 as well.

Motorola can leverage Airwave’s managed service infrastructure, contact center, and operational assets beyond the United Kingdom (EWU). This acquisition also increases recurring revenue streams by 50% and provides geographic diversification and additional smart public safety applications.

Article continues below advertisement

Services revenue rose in 2Q16

Driven by its acquisition of Airwave, revenues from MSI’s Services segment rose 26% YoY (year-over-year) in 2Q16, from $501 million in 2Q15 to $629 million in 2Q16.

MSI CEO Greg Brown stated the following: “Our managed and support services business grew 4% organically and we’re proceeding full steam ahead with the integration of Airwave after recently receiving unconditional clearance from the UK Competition and Markets Authority just a few weeks ago.”

Motorola purchased Airwave on a debt-free basis with a net cash payment of ~$1 billion. It will also make a deferred cash payment of $90 million in November 2018.


More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market RealistLogo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.