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Arris Buys Motorola Home From Google For $2.35B

MotorolaHome

[Techtaffy Newsdesk]

Arris Group 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 both companies.  The transaction is expected to close by the second quarter of 2013, subject to customary approvals and closing conditions.

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.

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.

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, according to a statement issued by the companies.

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 is acting as legal counsel to Google on this transaction.

[Image courtesy: Motorola Mobility]

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