Motorola is paying a 45 per cent premium on the value of Psion’s closing price on the London Stock Exchange on Thursday, when the company’s shares were suspended ahead of the announcement of the deal.
While Psion today is a shadow of the company that pioneered mobile computing in the 1980s and 1990s, it has carved out a niche for itself as a provider of rugged mobile devices and the mobile software infrastructure around them.
It has about 830 staff, customers in more than 50 countries and posted revenues of £176m in 2011. The bulk of the company today is based around Teklogic, the mobile services company that Psion acquired for £240m in 2000, just before it pulled out of consumer handheld devices.
Motorola, meanwhile, is now a specialist in mobile and network services following the sale of its mobile phone handset division to Google for $12.5bn (£8bn). It plans to adopt Psion products and services to expand its own range in the corporate mobile services market.
“Psion is a compelling opportunity to strengthen our industry-leading, mobile-computing portfolio with ruggedized handheld products and vehicle-mount terminals that will deepen our presence in the global markets in which we compete,” said Motorola Solutions chairman and CEO Greg Brown.
Psion has struggled following the global financial crisis in 2008, and the arrival of the Apple iPad, Android-based tablets, and the “bring your own device” trend in organisations. The company is particularly vulnerable to such lower cost devices as three-quarters of its revenues are derived from hardware rather than services.
“The offer by Motorola Solutions provides Psion’s shareholders with certainty in an environment where certainty is in short supply,” said Psion chairman John Hawkins.
Psion – short for Potter Scientific Instruments – started in the early 1980s as a developer of software for Sinclair home computers, including the ZX-80, ZX-81 and, most notably, the Sinclair ZX Spectrum.
It was best known for the “Horace” range of games for the Spectrum – in particular, Horace Goes Skiing (pictured) – until it launched the Psion Organiser in 1984. A rugged, handheld computer little bigger than a pocket calculator, the device proved popular with retailers, due to its simple-to-use database programming language, called OPL, which encouraged the development of a large software eco-system around the device.
It later developed a business around data networking cards and, with the development of the Series 5 Organiser in the mid-1990s, the Symbian operating system, which was later spun-out of the company to a consortium of mobile phone makers, including Nokia, Motorola and Ericsson.
The company was very much based around the personality of its founder, David Potter, who will also relinquish his last connection with the company following an agreement to sell his remaining shareholding to Motorola for just over £1m.