Motorola Inc has agreed to sell its Components Products Division to electrical components supplier CTS Corp for an initial $145m in cash and assumed debts, plus deferred compensation of up to $105m over five years based upon future performance. The division, which currently employs around 120 engineers, manufactures ceramics and surface acoustic wave components used primarily within telecommunications applications. Following the sale, Motorola is expected to remain the division’s biggest customer, accounting for roughly 45% of the $240m in annual revenues. The move is part of Motorola’s massive restructuring initiative announced in June this year which will see 15,000 job losses as the giant Schaumburg, Illinois-based company tries to return itself to financial health. Joseph Walker, chief executive of CTS, said the deal will see the Motorola division’s product development expertise beneficially combined with CTS’ global marketing and sales organization. He also expects to see cost savings at the division of up to $5m annually. The division’s present management team is being asked to stay on and the two companies expect to close the deal during the first quarter of 1999.
