On Tuesday (Sept. 19), Motorola (Schaumburg, Ill.) outbid IBM, NCR Corp. and other suitors after Symbol (Holtsville, N.Y.) announced its intention to sell its business midyear. The equity deal calls for Motorola to buy all outstanding shares of Symbol at $15 a share.

Symbol has about 5,200 workers, and reported 2005 earnings of $32.3 million on sales of $1.77 billion.

Motorola recorded fiscal 2005 net income of $4.58 billion on sales of $36.84 billion. It has 69,000 employees worlwide.

Symbol, which makes bar code scanners, handheld computers, wireless networking equipment and retail kiosks, will become a unit of Motorola's networks and enterprise business. Its headquarters will remain in Holtsville. The deal is expected to complement Motorola's Canopy, Wi-Fi mesh and WiMax products with Symbol's embedded Wi-Fi and RFID products.

Infonetics Research Inc. analyst Richard Webb said he expects Symbol's presence in industrial markets with multipurpose handhelds, barcode readers and RFID readers to provide a new market for Motorola.

Symbol's latest product is the RD5000, a mobile RFID bar code reader that can be integrated with forklifts, pallet jacks, stretch wrappers and other material handling equipment. The RD5000 reader will also support Symbol's upcoming Wireless-Next Generation RF-switching system.

Symbol ranks second in overall enterprise wireless LAN equipment revenue behind Cisco Systems. Still, Symbol's presence in large retail and corporate accounts explains why Motorola was willing to pay an 18-percent premium over Symbol's market share price.

In a conference call with analysts, Motorola CEO Ed Zander noted that large Symbol customers like Wal-Mart and Pepsi give Motorola a new presence outside traditional handset markets. Motorola ranks second in global handset sales behind Nokia.

Symbol, one of the first companies to offer a wireless LAN switch, scaled back its enterprise and OEM business since the telecom crash. At its peak, Symbol employed over 6,000 workers. To cut costs, the company closed a manufacturing operation in Bohemia, N.Y., and reduced overall employment to 5,000.

One unnamed investment banker called Symbol's reduced workforce "both a strength and a weakness."

Sal Iannuzzi, Symbol's CEO "came in with a mission of preparing assets for sale, and Motorola will have less of a worry about overhead than they might have a few years ago," the banker said. "The problem is that Symbol no longer is seen as a general leader in Wi-Fi; it's more recognized in industrial and embedded markets. They made some very cool mobile device launches at [the Consumer Electronics Show] in January, but their market presence clearly is not what it once was."

Iannuzzi became CEO a year ago in the aftermath of a 2004 court case in which seven former Symbol executives were charged with inflating earnings. The company was charged by the Securities and Exchange Commission with withholding data. The case was not expected to have an impact on the acquisition.

The deal is expected to close later this year or in early 2007. Motorola said the transaction won't affect its stock repurchase program.