Tuesday, September 19, 2006

Hit #114

Symbol Technologies (SBL), the leading maker of barcode scanners, is being acquired by Motorola for $3.9 billion in an all-cash deal. The offer being made, at $15/share, represents a gain of 27% over my average cost of $11.83/share.

I had written in the past about Motorola scouting for acquisitions and had singled out Symbol as a target for Motorola in this post.

The deal rumors were first reported by the Wall Street Journal on Sunday evening, and I had mentioned it here. Motorola is getting Symbol at a bargain price if the expected growth in RFID market materializes over the next few years. I would have preferred Motorola shares to cash, or better still, I would have liked this takeover even more if it came a couple of years from now, with Symbol shares at a much higher level.

Motorola's acquisition spree is just starting. Apart from its own cash pile, it has gained handsomely with the recent private equity buyout of Freescale Semiconductor, a Motorola spinoff. Companies like Nortel (NT), Palm (PALM), Research In Motion (RIMM) are all likely candidates, with Nortel being the best bargain available right now.

I will be looking into reinvesting the Symbol takeover proceeds in point-of-sale terminal makers / payment processors like Par Technology(PTC), Hypercom (HYC), Radiant Systems (RADS).

Previous hit - Windrose Properties (#113)


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