Motorola to Buy Netopia for $208M

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Beefing up its play for telco-TV business, Motorola Tuesday announced plans to acquire broadband-equipment vendor Netopia for $208 million in cash.

Netopia sells broadband customer-premises equipment designed for digital-subscriber-line networks, with products that include wired and wireless modems, routers and gateways.

Netopia's products have been deployed by telecommunications and broadband providers including AT&T, BellSouth, Covad Communications, Eircom and Swisscom.

"Motorola and Netopia share a common vision of the connected home as the hub for seamless mobility," said Dan Moloney, president of Motorola's Connected Home Solutions unit, in a prepared statement. "This acquisition advances our vision by strengthening the Connected Home Solutions business position as a leading supplier of technology and services to telecom providers worldwide."

Motorola expects the Netopia deal to be completed in early 2007.

Netopia had revenue of $113.3 million for the fiscal year ended Sept. 30, up 7% compared with $105.8 million for the previous fiscal year. Its net loss for the most recent fiscal year was $3.6 million compared with $7.1 million in the prior year.

The acquisition will give Motorola better ammo to square off against Cisco Systems in the telco space. Cisco in 2003 acquired Linksys, a maker of broadband-networking gear for consumers and small businesses.

Motorola said the Netopia acquisition will extend its current IPTV offerings, allowing it to provide "a full suite of home [customer-premises equipment] for copper-based telecom networks." In January 2006, Motorola acquired Kreatel, a Swedish IP set-top-box and middleware vendor.

After the acquisition closes, Motorola plans to maintain Netopia -- which has 297 employees -- as a wholly owned subsidiary based in Emeryville, Calif. Netopia will serve "as the new headquarters of Motorola's global voice and data CPE business." Netopia CEO Alan Lefkof will report directly to Moloney.

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