Yesterday, Motorola Solutions Inc. (MSI) declared that it has acquired privately held Twisted Pair Solutions, a leading provider of push-to-talk technology over broadband applications. However, the financial term of the acquisition is not disclosed.
Twisted Pair’s WAVE software communications platform provide integrated voice, text messaging, location and presence in one application for secure, real-time communication anywhere, on any device. The WAVE communications platform provides interoperability to extend land mobile radios, PBXs and other communication systems irrespective of any network, carrier, protocol or device.
Motorola Solutions stated that Twisted Pair will be integrated into its Government Solutions business segment. Throughout 2013, Motorola Solutions has been suffering from top line setback hurt by the poor performance of its Government Solutions segment.
Management cited reduced IT spending by several U.S. federal agencies as the main reason behind declining revenues. We also believe that Motorola Solutions’ failure to introduce innovative products in the two-way radio and rugged handheld devices market has also led to the top line decline.
Management has slashed its total revenue projection for fiscal 2013 three times in the last year. Motorola Solutions is heavily dependent on government expenditures for its revenue. Nearly 70% of its total sale comes from government agencies. We remain concerned that reduction in government expenditure and precipitous macroeconomic fluctuations may continue to affect the company’s top line.
At this juncture, we believe that the acquisition of Twisted Pair will prove beneficial to the company. Twisted Pair offers a standard communications platform used in critical situations by military, government and private enterprises worldwide.
Other Stocks to Consider
Motorola Solutions currently has a Zacks Rank #3 (Hold). Other stocks in the same industry which are performing well include InterDigital Inc. (IDCC), Comtech Telecommunications Corp. (CMTL) and Ubiquiti Network Inc. (UBNT). While both InterDigital and Ubiquiti Network currently carry a Zacks Rank #1 (Strong Buy), Comtech has a Zacks Rank #2 (Buy).