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(Bloomberg) — The last vestige of the Motorola empire is on the block after struggling with stagnant earnings. Motorola Solutions Inc., the $15.6 billion maker of two-way radios and other communications equipment, is exploring a possible sale, according to people familiar with the matter. Buyers could include private-equity firms or companies such as Raytheon Co., Honeywell International Inc. and General Dynamics Corp., said one of the people, asking not to be named because the information is confidential. A sale could mark the final step in the dismantling of Motorola Inc., which was split up four years ago into Motorola Solutions and a handset unit after a campaign by billionaire Carl Icahn. The handset business was sold to Google Inc., which then sold pieces of it to Lenovo Group Ltd. Motorola Solutions is working with financial advisers as it seeks a buyer, the people said. A transaction isn’t imminent, though a sale process has been under way for several months, one of the people said. Kurt Ebenhoch, a spokesman for Motorola Solutions, said the company doesn’t comment on rumors and speculation. Motorola Inc. was founded in Chicago in 1928 as Galvin Manufacturing Corp. to make a device that allowed battery- powered radios to run on household electricity. The company started producing car radios and expanded into communications with public-safety radios. That led to the two-way walkie-talkie and carphones. In 1973, the company began research on a portable phone prototype, using a concept for a cellular network developed by the former AT&T Corp.

Stagnant Outlook

Motorola Solutions, based in Schaumburg, Illinois, makes radio equipment for emergency workers. It’s struggled with earnings performance, with 2014 non-GAAP earnings per share from continuing operations dropping 33 percent as sales declined 6 percent. The outlook for this year remains stagnant — the company projects 2015 revenue will be flat to slightly lower.
At their closing price of $64.66 on Friday, the shares have gained 2 percent in the past year. The stock jumped as much as 8.3 percent to $70 in afterhours trading Friday. Motorola Solutions also offers technology services to clients including Prince George’s County in Maryland and the Las Vegas Metropolitan Police Department. Motorola Inc. first announced a plan to spin off its mobile-phone business in March 2008, amid market share losses and pressure from Icahn. The company delayed the move during the recession, completing the split in January 2011.

Google-to-Lenovo

The deal for Google’s $12.4 billion purchase of Motorola Mobility, announced just months after the split, marked an end as an independent company that helped pioneer mobile phones and introduced its first consumer handset in the early 1980s. Google, after subsequently selling off the set-top business, said last year it would sell the remains of Motorola Mobility — excluding the majority of the patents — to Chinese PC Maker Lenovo. In February 2012, Motorola Solutions bought $1.17 billion of its shares from Icahn, and said his representative on its board would step down. Existing shareholders include ValueAct Capital Management and Blackrock Inc.
Raytheon in November acquired Blackbird Technologies, a surveillance and cybersecurity company, for $420 million to bolster its intelligence business. In a Jan. 29 interview, Raytheon Chief Financial Officer Dave Wajsgras said the Waltham, Massachusetts-based company will pursue other deals, with an emphasis on expanding its cyber capabilities and electronic warfare business. “We will continue to focus on technology-based acquisitions in areas that we see we can expand our markets and build off of our technology foundation,” he said. Pamela Erickson, a spokeswoman for Raytheon, didn’t immediately comment, while Robert Ferris, a spokesman for Honeywell, declined to comment. Lucy Ryan, a spokeswoman for General Dynamics, couldn’t be reached outside of normal business hours.

–With assistance from Richard Clough in New York.

To contact the reporters on this story: Alex Sherman in New York at asherman6@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman