Mystery Surrounds Acquisitions by Motorola’s Home and Networks Mobility Business

In November, the Wall Street Journal published an article quoting sources who said Motorola was preparing to sell its home and networks mobility business for as much as $5 billion.

Since then, as noted by Billing and OSS World, Motorola has not been behaving as though it’s inclined to sell the business, which is its largest. To the contrary, Motorola has gone on an acquisitive tear, buying three small companies that are being folded into the group.

The latest purchase involves SecureM, LLC and its wholly owned subsidiaries, which together operate as SecureMedia, a developer of software-based digital rights management (DRM) and security systems for IP video distribution and management. SecureMedia develops and markets software systems for securing the distribution of digital entertainment over multiple platforms to multiple devices, including set-top boxes, wireless handsets, PCs, and portable entertainment devices. Its products are apparently approved by all major film studios and TV broadcasters.

Quoted in a press release announcing the acquisition, John Burke, senior vice president of Motorola Home & Networks Mobility business, said the following:

“Motorola continues to invest in our video infrastructure solutions as our customers evolve their networks to handle the explosion in consumer demand for video. SecureMedia has superior expertise in IP-based video security and digital rights management — critical capabilities for the emerging Internet Era of Television, where video content is mobilized across the three screens of TV, mobile phone and PC.”

As with the two preceding acquisitions — of Israel-based BitBand, involved in content-delivery networking and IPTV, and RadioFrame Networks’ iDEN business — terms were not disclosed. Doubtless these were not bank-breaking transactions, but one wonders how they are consistent with Motorola’s reported desire to sell the business into which they are being integrated.

It’s certainly possible, as I mentioned in a previous blog post, that Motorola might intend to sell the business in pieces, with part of it to be sold earlier to one buyer and the rest to be kept or sold later to a different acquirer.

The report that appeared in the Wall Street Journal was relatively detailed, with sources providing the identities of prospective acquirers and the names of the investment banks, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., said to be advising Motorola on the sale. I suspect there was some fire behind the smoke, but it’s difficult to know whether we’re dealing with a cigar stub in a wastebasket or a five-alarm blaze.

One presumes there’s some method behind the ostensible madness, so stay tuned.

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