Arris to Acquire Motorola Home Business from Google for $2.35 Billion

ARRIS Group ARRS said on Wednesday after the market close that it has struck a deal with Google GOOG to acquire the Motorola Home Business for $2.35 billion in cash and stock. The company, which is a global innovator in broadband media technology, will purchase the Motorola Home business from Motorola Mobility, which is a subsidiary of Google. The transaction has been approved by the Board of Directors of both companies and ARRIS anticipates that the deal will be "significantly accretive" to the company's non-GAAP earnings starting in the full year after closing. Under the terms of the acquisition, Google will receive $2.05 billion in cash and approximately $300 million in newly issued ARRIS shares. The deal is "subject to certain adjustments provided for in the agreement, representing an approximately 15.7% ownership interest in ARRIS post-closing." ARRIS said that its acquisition of Motorola Home will enhance the company's 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 company also noted that the transaction will increase its 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." ARRIS shares were unchanged in Wednesday's after hours trading session. Google shares had lost 0.22 percent to $718.50. "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." The cash portion of the deal will be funded through debt financing commitments from Bank of America Merrill Lynch BAC and Royal Bank of Canada. Evercore Partners is acting as the lead financial advisor to ARRIS on the transaction. Bank of America Merrill Lynch is also providing advisory services. The lead financial advisor to Google on the deal is Barclays BCS.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsFinancingManagementM&AIntraday UpdateTechBob StanzioneDennis Woodside
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!