by David Krebs, April 2015
The news that Motion Computing was acquired did not come as much of a surprise, nor the fact that it was acquired by the ever-opportunistic Xplore Technologies. What was striking, however, were the terms of the deal - $9 million cash and assumption of $7 million of Motion Computing's liabilities. Motion's struggles with profitability have been widely rumored within the industry, as the company has struggled for the past several years and lost significant market share, whereby its share of the rugged tablet market shrank by nearly one half over the past 4 years to the low teens in 2014.
However, the extent to which it was leveraged and its narrowing margin for error - resulting in such an abrupt deal - came as a shock. Thus, the impact of the Hydis plant closure (Hydis was Motion's single source for daylight viewable displays) was a critical blow that stopped the company in its tracks as it was unable to fulfill orders for roughly 40% of demand, including its recently released R12, which had been gaining momentum in the market. With no inventory on hand or opportunity to place a "final order" (as plant workers immediately went on strike following the announcement that the plant was being shuttered), this was ultimately crushing to Motion.