Motorola will acquire Netopia for about $208 million in cash, the companies announced today.

Motorola will pay $7 for each share of Netopia’s common stock, a 25% premium over Netopia’s stock price at the close of business yesterday.

A vendor of DSL customer premises equipment (CPE) and remote management software, Netopia gives Motorola a copper-based broadband product portfolio including wired and wireless modems, routers and gateways. Its North American customers include BellSouth, Covad Communications, EarthLink, AT&T and Verizon Communications.

Netopia reported more than $113 million in revenue for its 2006 fiscal year, a 7% increase from the previous year. And it reported net income of $0.05 per share for fiscal 2006 after an $0.11 per share loss the year before. At the end of September, the company had $28 million in net cash.

“This acquisition makes perfect sense, as we believe Netopia would otherwise have ended up in Cisco's or Netgear's arms,” Think Equity Partners analysts wrote in a research note this morning, calling the purchase price a “bargain” for Motorola. “Netopia's well-performing portfolio…is an attractive asset to several would-be acquirers.”

When the acquisition closes early next year, Netopia will become part of Motorola’s Connected Home Solutions business. And Netopia’s Emeryville, Calif., headquarters will become the new headquarters of Motorola’s global voice and data CPE business.

Motorola does not expect the acquisition to affect its earnings per share in the first year after it closes.

Netopia is Motorola’s second acquisition this month. Four days ago it acquired enterprise messaging firm Good Technologies.

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