According to reports Wednesday, Motorola Inc. can sale its set-top box business.
The Wall Street Journal reported that Schaumberg, Ill.-based Motorola is considering about a $4.5 billion sale to potential buyers that include Silver Lake Partners, which has offices in Cupertino and Menlo Park; and TPG, which has an office in San Francisco.
Other potential buyers of the business, which includes other equipment for phone and cable companies, could be makers of communications equipment, Bizjournals.com reports.
It was also reported, the company retained JPMorgan Chase & Co. and Goldman Sachs Group Inc. as advisers on a possible sale, people familiar with the matter said.
The division accounted for about a third of Motorola’s sales last quarter. The company, which posted losses of more than $4 billion last year, is betting on a series of smart phones based on Google Inc.’s Android operating system to revive growth, even as it plans to spin off the phone unit. A price of $4.5 billion “makes sense” for the set-top box division, said Matt Thornton, an analyst at Avian Securities LLC in Boston.
“We value this part of the business at a little over $3.8 billion,” said Thornton, who rates the shares “positive” and doesn’t own any. “This deal would indicate an 18 percent premium.”
Motorola said in a statement today that it doesn’t comment on rumor or speculation. It did say plans to separate into two independent companies “is the publicly stated long-term goal,” Bloomberg reports.
While growth in the mobile network equipment market has slowed dramatically in recent years, rival gear makers could see Motorola as a way to increase their market share, particularly in the United States.
Matthew Thornton said a $4.5 billion price tag would represent an 18 percent premium over his estimated valuation of $3.8 billion for the home and networks unit, based on operating earnings.
Analysts said that potential suitors could include Ericsson, Samsung Electronics Co Ltd , Alcatel Lucent SA or Nokia Siemens, a venture of Nokia and Siemens AG.
The story also cited China's Huawei Technologies Co Ltd and UK based Pace Plc as potential buyers, Reuters report.