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Motorola Solutions agrees £818M deal for UK’s Airwave

04 DEC 2015

Motorola Solutions struck a deal to acquire UK-based communications firm Airwave Solutions for £817.5 million, a move intended to grow its managed and support services business while bringing its partnership with Airwave fully inhouse.

The agreement comes after reports that the two companies entered into talks over a possible deal back in August, at a time when Motorola Solutions secured a $1 billion investment from a private equity firm to help it fund acquisitions.

Airwave is claimed to be “the largest private operator of a public safety network in the world,” using Terrestrial Trunked Radio (TETRA) technology from Motorola Solutions.

Motorola Solutions said in a statement it will make a net cash payment of approximately £700 million at closing of the deal, which is expected to be in the first quarter of 2016, subject to approvals. It will then make a deferred cash payment of £64 million in November 2018 (no mention was made of the remaining amount). It plans to fund the deal with “bank financing and cash, predominantly from international funds”.

Challenges
Motorola Solutions’ play may however come as a surprise to market watchers, given Airwave’s recent challenges, particularly in the UK.

The company was formed in 2000 and is headquartered in Berkshire, England, with approximately 600 employees. It is owned by Macquarie European Infrastructure Fund 2 and provides a communications network for UK emergency fire, police and ambulance services. It boasts its network covers 99 per cent of Great Britain’s landmass at present, and enables more than 300,000 emergency service personnel to communicate.

It was however withdrawn from a £1.2 billion government tender to improve emergency communication services in the UK earlier this year, which is designed to replace Airwave’s existing TETRA network. The TETRA network, according to reports, is deemed by the government as “inflexible and expensive”, and its proposal was withdrawn from the process.

Greg Brown, chairman and CEO at Motorola Solutions, talked up Airwave’s role in the UK in the acquisition announcement, stating that the deal “demonstrates our commitment to public safety in Great Britain”.

“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 enhance public safety today and into the future,” he said.

Speaking to Bloomberg, Motorola Solutions spokesman Kurt Ebenhoch said the TETRA-based Airwave network is “a preferred standard for mission critical communications in Europe. New networks with this technology continue to be deployed, most recently in Norway.”

Ovum analyst Catherine Haslam told Mobile World Live in August that there is “a natural fit” between the companies. “To provide the service levels that is now required, I believe it will need significant support of a major supplier like Motorola,” she added.

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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