SUWANEE, Ga. and MOUNTAIN VIEW, Calif., Dec. 19, 2012 /PRNewswire/ -- ARRIS Group,
Inc. (NASDAQ: ARRS), a global innovator in broadband media
technology, and Google Inc. (NASDAQ: GOOG) today jointly announced
that ARRIS and Motorola Mobility, a Google subsidiary, have entered
into a definitive agreement under which ARRIS will acquire the
Motorola Home business from Motorola Mobility, for $2.35 billion in a cash-and-stock transaction
approved by the Boards of Directors of both companies. The
acquisition will be on a cash-free, debt-free basis and is expected
to be significantly accretive to ARRIS' Non-GAAP earnings starting
in the first full year after closing.
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.
Acquiring Motorola Home will enhance ARRIS' ability to provide
next-generation consumer video products and services, supporting a
more comprehensive product offering while also accelerating its
ability to deliver a comprehensive set of industry-leading new
products for broadband to a wide spectrum of customers. The
transaction will increase ARRIS' patent portfolio and provide a
license to a wide array of Motorola Mobility patents.
"This transformational combination of two complementary
businesses will create a leading end-to-end provider of today's
video, data, and voice products and tomorrow's next-generation
IP-based broadband products," said Bob
Stanzione, Chairman and CEO of ARRIS. "Ever-expanding
consumer demand for bandwidth will continue to drive growth across
cloud and network technologies we provide that enable innovative
home entertainment products and services."
"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 capitalize on and manage the evolution toward
multi-screen home entertainment. We look forward to working
with the Motorola Home team as we integrate their complementary
product portfolio and engineering expertise to accelerate
best-in-class end-to-end solutions to a broader customer base and
increase value for shareholders," Stanzione continued.
Together, 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 trailing four quarter period
ended September 30, 2012. The
combined entity will offer a wide array of products and solutions
and will have an expanded customer base encompassing the full
spectrum of broadband content and service providers.
"Our Home business has been a vibrant part of Motorola
Mobility's portfolio, innovating while delivering strong financial
performance," said Dennis Woodside,
Chief Executive Officer of Motorola Mobility, the Google subsidiary
that is the parent of Motorola Home. "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."
"We share a similar vision and strategy with ARRIS for the
industry's migration to IP. The combination of our solutions,
expert technologists and roadmaps promises to transform how service
providers deliver the smart, simple connected home to consumers
throughout the world," said Marwan
Fawaz, the Executive Vice President of Motorola Mobility who
leads Motorola Home.
Motorola Home is a profitable business that generated revenues of
$3.4 billion for the trailing four
quarters ended September 30, 2012.
The combination is expected to generate approximately
$100 - $125 million in annual cost
synergies.
The transaction is expected to close by the second quarter of
2013, subject to customary approvals and closing conditions.
The cash portion of the consideration to be received by Google
at closing will be funded through debt financing commitments from
Bank of America Merrill Lynch and Royal Bank of Canada.
Evercore Partners is acting as lead financial advisor and
Troutman Sanders is acting as lead
legal counsel to ARRIS on this transaction. Bank of America
Merrill Lynch is also advising ARRIS. Barclays is acting as
financial advisor and Cleary Gottlieb
Steen & Hamilton LLP is acting as legal counsel to
Google on this transaction.
Conference Call and Webcast Details
ARRIS will host a conference call at 6:30
pm EST today to discuss this announcement. You may
participate in this conference call by dialing (800) 299-7098 or
(617) 801-9715 for international calls prior to the start of the
call and providing the ARRIS Group, Inc. name, conference pass code
92735185, and Bob Puccini as the
moderator. A replay of the conference call can be accessed
approximately two hours after the call through December 26, 2012 by dialing (888) 286-8010 or
(617) 801-6888 and using the pass code 25900440. Live
internet access to the call will be available through the Investor
Relations section of the Company's website at www.arrisi.com.
A replay will also be made available for a period of 12 months
following the conference call on ARRIS' website at
www.arrisi.com.
About ARRIS
ARRIS is a global communications technology company specializing
in the design, engineering and supply of technology supporting
triple- and quad-play broadband services for residential and
business customers around the world. The company supplies broadband
operators with the tools and platforms they need to deliver
converged IP video solutions, carrier-grade telephony, demand
driven video, next-generation advertising, network and workforce
management solutions, access and transport architectures and ultra
high-speed data services. Headquartered in Suwanee, GA, USA, ARRIS has R&D centers in
Suwanee, GA; Beaverton, OR; Lisle, IL; Kirkland,
WA; State College, PA;
Tel Aviv, Israel; Wallingford, CT; Waltham, MA; Cork,
Ireland; and Shenzhen,
China, and operates support and sales offices throughout the
world. Information about ARRIS products and services can be found
at www.arrisi.com
About Motorola Mobility
Motorola Mobility, owned by Google, fuses innovative technology
with human insights to create experiences that simplify, connect
and enrich people's lives. Our portfolio includes converged mobile
devices such as smartphones and tablets; wireless accessories;
end-to-end video and data delivery; and management solutions,
including set-tops and data-access devices. For more information,
visit motorola.com/mobility.
About Motorola Home
Motorola Mobility's Home business delivers the smart, simple
connected home, which is driving the evolution of TV. The company
is a global IP business that is pioneering advancements in the
cloud, the network, and the home to enable the desired IP Connected
Home and future service provider revenue streams. Its end-to-end
platform includes advanced software and network technology,
services and systems integration, content security, managed home
solutions, and next-gen home devices that deliver rich user
experiences. For more information, visit:
www.motorola.com/Video-Solutions/US-EN/Home.
About Google, Inc.
Google is a global technology leader focused on improving the
ways people connect with information. Google's innovations in web
search and advertising have made its website a top Internet
property and its brand one of the most recognized in the world.
Forward-Looking Statements
This press release contains forward looking statements.
These statements include, among others, statements concerning
future performance of ARRIS following the completion of the
Motorola Home Business acquisition; ARRIS' ability to achieve the
strategic benefits and synergies outlined; and whether, and the
time frame during, which the acquisition will close.
Statements regarding future events are based on the parties'
current expectations. Actual results may differ materially
from those suggested by any forward-looking statement.
Forward-looking statements are necessarily subject to associated
risks related to, among other things, successful outcome of the
acquisition process, regulatory approval of the acquisition, the
potential impact on the business of Motorola Home Business due to
uncertainty about the acquisition, the retention of employees of
Motorola Home Business and the ability of ARRIS to successfully
integrate Motorola Home's opportunities, technology, personnel and
operations. Other factors that could cause results to differ
from current expectations include: the uncertain current economic
climate and financial markets, and their impact on our customers'
plans and access to capital: the impact of rapidly changing
technologies; the impact of competition on product development and
pricing; the ability of ARRIS to react to changes in general
industry and market conditions; rights to intellectual property and
the current trend toward increasing patent litigation, market
trends and the adoption of industry standards; possible
acquisitions and dispositions; and consolidations within the
telecommunications industry of both the customer and supplier
base. These factors are not intended to be an
all-encompassing list of risks and uncertainties that may affect
the Company's business. Additional information regarding these and
other factors can be found in ARRIS' reports filed with the
Securities and Exchange Commission, including its Form 10-Q for the
quarter ended September 30,
2012. In providing forward-looking statements, the Company
expressly disclaims any obligation to update publicly or otherwise
these statements, whether as a result of new information, future
events or otherwise.
ARRIS Contacts
For Investors
Bob
Puccini, ARRIS Investor Relations
(720) 895-7787
bob.puccini@arrisi.com
For Media
Alex Swan,
ARRIS Media Relations
(678) 473-8327
alex.swan@arrisi.com
Matt Benson/Jenny Gore, Sard Verbinnen & Co
(212) 687-8080/(415) 618-8750
mbenson@sardverb.com / jgore@sardverb.com
Google Contacts
For Investors
Willa
Chalmers
(650) 214-3381
willa@google.com
For Media
press@google.com
Motorola Contacts
For Media
Jennifer
Erickson
(847) 523-2422
jennifer.erickson@motorola.com
Jeanne Russo
(215) 323-1880
jeanne.russo@motorola.com
SOURCE ARRIS Group, Inc.