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UPDATE 1-Motorola to buy video technology supplier Terayon

Mon Apr 23, 2007 11:09am EDT

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(Adds details, share move, previous dateline PHILADELPHIA)

NEW YORK, April 23 (Reuters) - Motorola Inc. (MOT.N), the world's No. 2 mobile phone maker, said on Monday it will buy Terayon Communication Systems Inc. TERN.PK for about $140 million in a bid to boost its video technology.

The deal - the latest in a spate of Motorola acquisitions - would give it technology that lets service providers offer video based on regional and local interest and allows for the insertion of digital advertising and graphical overlays.

Motorola, of Schaumburg, Illinois, said it would pay about $1.80 per share in cash for each share of Terayon in a deal that is expected to be neutral to Motorola's earnings per share in the first year, excluding acquisition-related charges.

Motorola, which is struggling with weakness in its mobile phone unit, has been beefing up its home video and network technology business in the last year as U.S. phone carriers have been launching Internet-based video services.

It acquired digital video technology developer Tut Systems in March, and bought networking firm Netopia Inc. in February. These deals followed purchases of video technology firms Vertasent LLC, Broadbus Technologies and Kreatel last year.

The company's biggest recent deal was its $3.9 billion purchase of rugged handset maker Symbol Technologies Inc. in January. It also bought wireless e-mail company Good Technology for an undisclosed sum in the first quarter this year.

Motorola said it expected the Terayon deal to close in the second or third quarter. Motorola shares were down 8 cents at $18.13 in morning trade on the New York Stock Exchange.

((Reporting by Sinead Carew and Jessica Hall, editing by Dave Zimmerman; Reuters Messaging: sinead.carew.reuters.com@reuters.net; +1 646-223-6186)) Keywords: TERAYON MOTOROLA/

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