Zebra Technologies is buying rugged tablet maker Xplore for around $90M in cash | Industry News
Some more consolidation is afoot in the world of enterprise mobility. Today, Zebra Technologies — a company that makes handheld scanners, printers and other portable hardware, and develops the technology to tag things to be read by them — is acquiring Xplore Technolgies, one of the older and bigger makers of ruggedised tablets and other hard-wearing hardware. Both companies are publicly listed and Zebra says it will be paying $6 per share in cash for Xplore, which works out to about $90 million — a premium on the company’s current market cap of about $65 million.
Zebra’s market cap is just under $8 billion.
The deal will give Zebra deeper inroads into the retail, manufacturing, transporpation, logistics and healthcare verticals and also give the company avenues to sell into further markets where Xplore already has customers such as the energy sector, government and public safety, Zebra said. Xplore booked $87 million in revenue in the 12 months that ended March 31.
Xplore generated revenue of $87 million in the 12-month period ended March 31, 2018, but it’s never been massively profitable. In the fourth quarter, which the company reported earlier today, Xplore scraped out a net profit of $300,000 (compared to a loss of $2.6 million a year ago).
As with a lot of enterprise consolidation, which sees smaller companies coming together or bigger fish gobbling up smaller but promising fish, the idea will be to bring together its hardware business into a wider operation to create more manufacturing efficiencies and to sell more services to Xplore customers to improve margins on those deals, which Zebra says is in line with how businesses are looking to operate today anyway.
“In today’s on-demand economy, investments to digitize operations are central to our customers’ strategies. The acquisition of Xplore enhances our product lineup and gives Zebra a complete rugged tablet portfolio that enables our customers to gain a performance edge,” said Anders Gustafsson, chief executive officer of Zebra Technologies, in a statement. “We’d previously outlined potential areas of expansion that are a natural fit for Zebra and its Enterprise Asset Intelligence vision, and this acquisition is aligned with that strategy. The addition of Xplore provides access to a great team and great products in an attractive market and should enable us to grow the category double digits going forward.”
Zebra has carved out a place for itself as a buyer of operations that need more scale to see their potential realised, making around 14 since 1998. Perhaps most notably, it acquired the enterprise business of Motorola Solutions for $3.5 billion in a big Internet of Things play. Xplore’s emphasis on devices complements that with a set of hardware for when machine-to-machine communications may not be enough.
“We are excited to join Zebra, the worldwide leader in enterprise mobility and visibility. This acquisition validates the incredible work our team does every day to develop innovative solutions and serve our customers,” said Tom Wilkinson, chief executive officer of Xplore Technologies, in his statement. “Our products are a natural fit for Zebra, creating a comprehensive rugged mobility portfolio that stands against any competitor.”
The companies say the deal is expected to close in Q3 2018.