ARRIS beats Pace to Motorola Home Business in $2.35BN deal
Editor | 20-12-2012
Broadband media technology provider ARRIS Group has swooped from under the radar to acquire the Motorola Home business of Motorola Mobility in a $2.35 billion cash-and-stock transaction.
The surprise news comes as a huge blow to broadcast technology services supplier Pace which, in attempt to shrug off its recent managerial and contract problems, notably losing the rights to supply BT with technology for its YouView services, was first to show with a prospective bid on 11 December 2012.
The Motorola Home business line designs, manufactures, sells, installs and services set-top boxes for digital and IP video, satellite and terrestrial broadcast networks, and IPTV distribution systems, broadband access network infrastructure platforms, and associated software solutions to cable TV and telcos.
ARRIS says that its deal, approved by both companies’ boards of directors, will be a “transformative combination” that will create a global player in end-to-end broadband video solutions and which will generate “significant earnings”, increase its patent portfolio, provide a licence to a wide array of Motorola Mobility patents and accelerate to market new consumer video products and services products.
As a combined entity, ARRIS and Motorola Home will have a global presence with over 500 customers in 70 countries, more than tripling ARRIS pro forma combined revenue to approximately $4.7 billion for the four quarter period ended 30 September 2012.
Under the terms of the agreement, upon closing of the transaction, Google will receive $2.05 billion in cash and approximately $300 million in newly issued ARRIS shares, subject to certain adjustments provided for in the agreement, representing an approximately 15.7% ownership interest in ARRIS post-closing.
"Ever-expanding consumer demand for bandwidth will continue to drive growth across the cloud and network technologies we provide that enable innovative home entertainment products and services," commented Bob Stanzione, chairman and CEO of ARRIS
"Acquiring Motorola Home builds on ARRIS' rich history, creating a global player with significant footprint, revenue and cash flow. It also adds expertise in video and a larger presence in the home to our core strengths in voice and data, ensuring we are even better positioned to capitalise on and manage the evolution toward multiscreen home entertainment.”
"The industry faces its biggest technology transformation, and together ARRIS and Motorola will be able to accelerate related innovations such as the introduction of the IP connected home environments that service providers need and that their consumers crave," added Dennis Woodside, chief executive officer of Motorola Mobility, the Google subsidiary that is the parent of Motorola Home.