Under the terms of the deal, Motorola has agreed to pay $7 for each Netopia share. Netopia's shares closed at $5.29 on Monday on the Nasdaq stock exchange. The total deal is estimated to be worth $208 million.
Netopia, which is based in Emeryville, Calif., sells routers and modems used to provide broadband services over digital subscriber lines, or DSL. The company counts big telephone companies, including AT&T, Verizon Communications and Swisscom, among its long list of customers.
Motorola plans to use the Netopia products to boost its offerings in the digital home. Many of the phone companies that use Netopia's gear are upgrading their networks to support Internet television services. Motorola already provides set-top boxes to many of these carriers, but the equipment from Netopia will also enable Motorola to offer new products such as home media hubs and voice gateways.
As Motorola bulks up its networking-equipment portfolio, it will compete more aggressively with Cisco Systems, which a year ago.
Motorola has been on a buying spree lately. Last week, it agreed to, a provider of service for wireless e-mail, for an undisclosed sum. The acquisition will increase Motorola's reach in the market for mobile e-mail, which has been dominated by BlackBerry maker Research In Motion.
In September, Motorola, which makes handheld bar code scanners, for $3.9 billion in cash.
Separately on Tuesday, Netopia reported a loss of $1.5 million for its fiscal fourth quarter, which ended September 30. The company said revenue for the year was $113.3 million, compared with $105.8 million for the previous year.