Emerson Electric Co. will acquire Motorola’s Embedded Communications Computing business in Tempe for $350 million in cash, the two companies announced Friday.
The deal, which is subject to regulatory approvals and closing conditions, is expected to be completed by the end of this year.
The acquisition would further reduce Motorola’s presence in the Valley, where it was once the largest privatesector employer.
Motorola’s ECC unit had revenue of $520 million in 2006 and will strengthen Emerson’s position in the $6 billion embedded computing industry, the companies said.
Upon completion of the transaction, the business will become part of the Emerson Network Power unit.
ECC has about 1,100 employees — the majority based in Tempe, although a few are located in foreign countries, according to Motorola.
The business makes embedded computing products used in communications infrastructure, telecommunications, medical imaging, industrial automation, defense and aerospace equipment.
Embedded computers are used to control machines and manage data. In telecommunications, for example, embedded computers are used in local and long distance land line offices and wireless base stations to route and monitor voice, video and data information.
The transaction will allow Motorola to further grow its core businesses, the company said. “We regularly evaluate our company’s portfolio to ensure alignment with our core vision and business strategies to enhance shareholder value,” said Chief Executive Officer Ed Zander in a statement.
“We believe that Emerson has the proven track record to continue to serve ECC’s customers with the same high quality and level of products and services.”
Emerson, based in St. Louis, had sales of $20.1 billion in 2006 while Schaumburg, Ill.-based Motorola’s sales were $42.6 billion last year.
Motorola spokeswoman Jennifer Erickson said the sale would not affect the company’s plans to move its Home and Networks Mobility operations with 750 employees from south Chandler to the ECC site in Tempe by early next year. That move, announced in June, would consolidate most of the company’s remaining Valley operations in one location at 2900 S. Diablo Way.
During the past decade the company has spun off its semiconductor operations to ON Semiconductor and Freescale Semiconductor and sold its military electronics business in Scottsdale to General Dynamics.
Emerson spokesman Mark Polzin declined to say if Emerson will keep the embedded computing unit in Tempe. He said Emerson’s similar business is based in Madison, Wis.
“The deal hasn’t closed yet, so we can’t speculate at this point on the impact on employees or locations,” he said.
Emerson said the transaction will enhance its capabilities in telecommunications and other industries. Emerson acquired an embedded computing business as part of its purchase of Artesyn Technologies in 2006.
“The combination of Motorola’s ECC business with the $100 million embedded computing business we acquired as part of Artesyn last year establishes Emerson as a leader in the embedded computing industry,” said Emerson Chief Executive Officer David N. Farr in a statement.