Barcode scanner maker Zebra in $1.3 billion deal to buy Elo Touch, boosts forecasts

Reuters

15 hours ago

Aug 5 (Reuters) - Barcode scanner maker Zebra Technologies (ZBRA.O), opens new tab is expanding its retail-focused business with a $1.3 billion buyout of touchscreen maker Elo Touch Solutions, after upbeat second-quarter results fueled by growing sales of its devices.
Shares of the company rose nearly 7% in premarket trading on Tuesday as it raised its annual targets for revenue and profit, also benefiting from the acquisition of Slovakian 3D imaging company Photoneo.
As more businesses digitize operations, demand has grown for Zebra's handheld computers, barcode scanners and tracking devices that help store workers manage inventory, warehouse staff move goods and delivery teams monitor shipments.
The all-cash deal for Elo Tech, expected to close in 2025, will help Zebra offer frontline workers Elo's self-service kiosks, payment terminals and touchscreen systems.
"This acquisition represents the next step in our journey to accelerate the connected frontline," Zebra CEO Bill Burns said, adding it would expand the company's addressable market by $8 billion.
Elo Touch, whose products are used by companies such as JCPenny, has annual sales of about $400 million. Its buyout will immediately add to Zebra's earnings and generate about $25 million of additional core profit three years after close.
Zebra's performance in the April-June quarter also benefited from lower-than-expected tariffs, with the company diversifying its supply chain across China, Vietnam, Malaysia and Mexico.
It had raised prices on most North America products in April, in anticipation of cost pressures from tariffs.
The company expects annual sales growth of between 5% and 7%, compared with a prior forecast of 3% to 7%. Annual adjusted profit per share is expected to be between $15.25 and $15.75, up from $13.75 to $14.75.
Sales jumped 6.2% in the second quarter to $1.29 billion, in line with estimates. Adjusted profit was $3.61 a share, above estimates of $3.32, according to data compiled by LSEG.