Motorola Inc is paying $208m in cash for broadband customer premise equipment, CPE, vendor Netopia Inc in a move to strengthen its $2.8bn-a-year connected home solutions business.
Emeryville, California-based Netopia offers a range of products for DSL networks, including wired and wireless modems, routers, and gateways. The deal is designed extends Motorola’s products for the emerging IPTV market.
Motorola said it can now offer a full suite of home CPE for copper-based telecom networks, including home media hubs, voice gateways, and IP set-top boxes. It said Netopia’s software also gives it service and device management capabilities with a platform for the centralized management of IP-based gateways, modems, and voice-over-IP equipment.
Though Motorola’s connected home business increased revenue by 25% last year, the November 2005 move by Cisco Systems to pay $6.9bn for Scientific-Atlanta Inc, its largest rival in the set-top box market, meant that competition was bound to increase.
Netopia will benefit from new management. The company revealed full-year figures yesterday that showed that in the middle of a broadband boom, it increased revenue by only 7% to $113.3m in the year to September 30, and increased its net loss from $1.3m to $1.5m. Once the deal is completed, Netopia will be integrated into Motorola’s connected home solutions business but will maintain its Californian base.
Motorola expects the deal to be neutral to its earnings per share in the first year following closing, excluding certain non-cash charges relating to the acquisition.
Motorola has been active on the takeover front recently. It paid an undisclosed sum last week for business mobile software maker Good Technology Inc, and in September it paid $3.9bn cash for enterprise mobility specialist Symbol Technologies Inc. With $3bn left in the bank, Motorola’s spending spree would appear to be far from over.