SUWANEE, Ga. and SALTAIRE, UK,
April 22, 2015 /PRNewswire/
-- ARRIS Group, Inc. (NASDAQ: ARRS), a global innovator in
broadband media technology, and Pace plc. (LSE: PIC) today jointly
announced that they have agreed that ARRIS will acquire Pace for
aggregate stock and cash consideration of US$2.1 billion (£1.4 billion). The acquisition is
expected to be accretive to ARRIS Non-GAAP earnings per share in
the first 12 months following the acquisition.
Key benefits of the
transaction:
- Accelerates growth strategy
- ~US$8B Pro forma revenues
- ~8,500 combined employees, globally based
- Provides large scale entry into satellite segment
- Enhances international
presence
- Expands product portfolio across equipment, software, and
services
- Financially compelling
- US$0.45 to US$0.55 accretive in
the first 12 months after close to Non-GAAP EPS
- Reduces Non-GAAP tax rate to approximately 26% - 28%
- Significant synergy
opportunity
- Maintains capital structure flexibility
Transaction details:
The transaction will result in the formation of New ARRIS, which
will be incorporated in the U.K., and its operational and worldwide
headquarters will be in Suwanee,
GA USA. New ARRIS is expected to be listed on the NASDAQ
stock exchange under the ticker ARRS. In connection with the
formation of New ARRIS each current share of ARRIS will be
exchanged for one share in New ARRIS.
Under the agreed upon terms, Pace shareholders will receive
£1.325 of cash and a fixed exchange ratio of 0.1455 New ARRIS
shares for each Pace share, reflecting aggregate consideration as
of April 21, 2015 of £4.265 per
share, representing a 28% premium to the Pace closing share price
as of April 21, 2015. The cash
portion will be funded through a combination of cash and
debt. ARRIS has secured a fully committed facility from Bank
of America Merrill Lynch to meet the funding
requirements.
Pace shareholders will receive approximately 48.2 million shares
of New ARRIS in aggregate. On a pro forma basis current ARRIS
shareholders will hold ~76% of New ARRIS and Pace shareholders will
hold ~24% of New ARRIS. The transaction is expected to be taxable,
for U.S. federal income tax purposes, to the shareholders of
ARRIS.
The proposed transaction has been approved by the respective
Boards of Directors of ARRIS and Pace and is expected to close in
late 2015 after the satisfaction of customary closing conditions,
including ARRIS and Pace shareholder approval and regulatory
approvals.
ARRIS Chairman and CEO, Bob
Stanzione will be New ARRIS Chairman and CEO and the
then-current ARRIS Board of Directors will serve as the New ARRIS
Board of Directors.
"This transaction is another example of ARRIS's ongoing strategy
of investing in the right opportunities to position our company for
growth. Adding Pace's talent, products and diverse customer base
will provide ARRIS with a large scale entry into the satellite
segment, broaden our portfolio and expand our global presence. We
expect this merger will enable ARRIS to increase its speed of
innovation. We believe this is a tremendous opportunity for ARRIS
and our customers, employees, shareholders and partners around the
world as we collaborate to invent the future," said Bob Stanzione. "We look forward to working with
the talented and accomplished team at Pace."
"Pace plc is a great company with a strong track record of
pioneering innovation and excellent customer service. Through a
combination of organic development and acquisitions, Pace has grown
to be a leading technology solutions provider to the PayTV and
Broadband industries serving cable, satellite and telco customers
across the globe. Over the last three years, Mike Pulli and the
wider Pace team have successfully executed against our strategic
plan to develop Pace into a more distinctive, profitable and cash
generative company, creating significant value for
shareholders.
"The Pace Directors believe that ARRIS's offer recognises this
value and also gives our shareholders the opportunity to share in
the future success of the combined group. While we believe that
Pace is strongly positioned to continue to execute its strategy in
the medium and long term, we believe that the combination of the
complementary ARRIS and Pace businesses will create a platform for
future growth above and beyond our standalone potential. We believe
this is a great fit for both companies, our employees, customers
and trading partners," said Allan
Leighton, Chairman of Pace.
Evercore is acting as lead financial advisor; Troutman Sanders is acting as lead US legal
counsel and Herbert Smith Freehills is acting as lead UK legal
counsel to ARRIS on this transaction. Bank of America Merrill Lynch
is also advising ARRIS. J.P. Morgan Cazenove is acting as lead
financial advisor and Travers Smith is acting as lead legal counsel
to Pace on this transaction.
Conference Call and Webcast Details
ARRIS will host a
conference call at 5:00 pm ET today
to discuss this announcement. You may participate in this
conference call by dialing (888) 713-4218 or (617) 213-4870 from
the US, 080 0055 6013 or +44 20 7136 5118 from the UK prior to the
start of the call and providing the ARRIS Group, Inc. name,
conference pass code 14190410, and Bob
Puccini as the moderator. A replay of the conference call
can be accessed approximately two hours after the call through
April 29, 2015 by dialing (888)
286-8010 or (617) 801-6888 and using the pass code 55255256. Live
internet access to the call will be available through the Investor
Relations section of the Company's website at www.arris.com. A
replay will also be made available for a period of 12 months
following the conference call on ARRIS's website at
www.arris.com.
Pace acquisition-specific documents can be found at
www.arris.com/pace
About ARRIS:
ARRIS is a global innovator in IP, video
and broadband technology. We have continually worked with our
customers to transform the experience of entertainment and
communications for millions of people around the world. The people
of ARRIS are dedicated to the success of our customers, bringing a
passion for invention that has fueled our history: we created
digital TV, delivered the first wireless broadband gateway and are
pioneering the standards and pathways for tomorrow's personalized,
Ultra HD, multiscreen, and cloud services. We are dedicated to
meeting today's challenges and preparing for the tasks the future
holds. Collaborating with our customers, ARRIS will continue to
solve the most pressing challenges of 21st century communications.
Together, we are inventing the future. For more information:
www.arris.com
For the latest ARRIS news:
Check out our Blog: ARRIS
EVERYWHERE
Follow us on Twitter @ARRIS EVERYWHERE
About Pace:
Pace (LSE: PIC) is a leading provider of
technology solutions to the PayTV and Broadband industries. With a
broad portfolio of customer premises equipment, network solutions,
and software and services, Pace empowers service providers to
simply and cost-effectively innovate at the speed they want, and to
define the evolution of their networks in the way they want for
their subscribers. Pace has built up its experience and expertise
over 30 years and this is recognized by a customer base of over 200
operators around the globe.
Headquartered in the UK, Pace operates in markets across the
world, and employs around 2,300 people in locations that also
include the USA, France, India, and China. For further information, visit:
www.pace.com.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
No Offer or Solicitation
This document is provided for
informational purposes only and does not constitute an offer to
sell, or an invitation to subscribe for, purchase or exchange, any
securities or the solicitation of any vote or approval in any
jurisdiction, nor shall there be any sale, issuance, exchange or
transfer of the securities referred to in this document in any
jurisdiction in contravention of applicable law.
Forward-Looking Statements
This document may contain
forward-looking statements concerning certain trends, expectations,
forecasts, estimates, or other forward-looking information
affecting or relating to PACE or ARRIS or its industry, products or
activities that are intended to qualify for the protections
afforded "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995 and other laws and regulations.
Forward-looking statements speak only as to the date of the
document and may be identified by the use of forward-looking terms
such as "may", "will", "expects", "believes", "anticipates",
"plans", "estimates", "projects", "targets", "forecasts",
"outlook", "impact", "potential", "confidence", "improve",
"optimistic", "deliver", "comfortable", "trend" and "seeks,", or
the negative of such terms or other variations on such terms or
comparable terminology. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from those indicated in the forward-looking
statements. Such risks and uncertainties include, but are not
limited to, the possibility that a possible combination will not be
completed, failure to obtain necessary regulatory approvals or
required financing or to satisfy any of the other conditions to the
possible combination, adverse effects on the market price of ARRIS
shares and on ARRIS's or Pace's operating results because of a
failure to complete the possible combination, failure to realize
the expected benefits of the possible combination, negative effects
relating to the announcement of the possible combination or any
further announcements relating to the possible combination or the
consummation of the possible combination on the market price of
ARRIS shares or Pace shares, significant transaction costs and/or
unknown liabilities, customer reaction to the announcement of the
combination, possible litigation relating to the combination or the
public disclosure thereof, general economic and business conditions
that affect the combined companies following the consummation of
the possible combination, changes in global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax laws or their
interpretation or application, regulations, rates and policies,
future business combinations or disposals and competitive
developments. These factors are not intended to be an
all-encompassing list of risks and uncertainties. Additional
information regarding these and other factors can be found in
ARRIS's reports filed with the SEC, including its Annual Report on
Form 10-K for the year ended December 31,
2014. By their nature, forward-looking statements involve
known and unknown risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future.
The factors described in the context of such forward-looking
statements in this Announcement could cause ARRIS's plans with
respect to Pace, ARRIS's or Pace's actual results, performance or
achievements, industry results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct and persons reading this document are
therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this
document. ARRIS and Pace expressly disclaim any obligation to
release publicly any revisions to forward-looking statements as a
result of subsequent events or developments, except as required by
law.
Important Additional Information Regarding the Transaction
Will Be Filed With The SEC
It is expected that the shares of
New ARRIS to be issued by New ARRIS to Pace shareholders under the
scheme will be issued in reliance upon the exemption from the
registration requirements of the Securities Act of 1933, as
amended, provided by Section 3(a)(10) thereof. In connection
with the issuance of New ARRIS shares to ARRIS stockholders
pursuant to the merger that forms a part of the combination, New
ARRIS will file with the SEC a registration statement on Form S-4
that will contain a prospectus of New ARRIS as well as a proxy
statement of ARRIS relating to the merger that forms a part of the
combination, which we refer to together as the Form S-4/Proxy
Statement.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE FORM
S-4/PROXY STATEMENT, AND OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE TRANSACTION CAREFULLY AND IN THEIR ENTIRETY,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE RISKS
ASSOCIATED WITH THE TRANSACTION. Those documents, if and when
filed, as well as ARRIS's and New ARRIS's other public filings with
the SEC may be obtained without charge at the SEC's website at
www.sec.gov, at ARRIS's website at http://ir.arris.com. Security
holders and other interested parties will also be able to obtain,
without charge, a copy of the Form S-4/Proxy Statement and other
relevant documents (when available) by directing a request by mail
to ARRIS Investor Relations, 3871 Lakefield Drive, Suwanee, GA 30024 or at http://ir.arris.com.
Security holders may also read and copy any reports, statements and
other information filed with the SEC at the SEC public reference
room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at
(800) 732-0330 or visit the SEC's website for further
information on its public reference room.
Participants in the Solicitation
ARRIS, its directors
and certain of its executive officers may be considered
participants in the solicitation of proxies in connection with the
transactions contemplated by the Proxy Statement. Information about
the directors and executive officers of ARRIS is set forth in its
Annual Report on Form 10-K for the year ended December 31,
2014, which was filed with the SEC on February 27, 2015, and its proxy statement for
its 2015 annual meeting of shareholders, which was filed with the
SEC on April 9, 2015. Other
information regarding potential participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Proxy Statement/Prospectus when it is filed.
Pace and New ARRIS are each organized under the laws of
England and Wales. Some of the officers and directors of
Pace and New ARRIS are residents of countries other than
the United States. As a result, it
may not be possible to sue Pace, New ARRIS or such persons in a
non-US court for violations of US securities laws. It may be
difficult to compel Pace, New ARRIS and their respective affiliates
to subject themselves to the jurisdiction and judgment of a US
court or for investors to enforce against them the judgments of US
courts.
Responsibility
The directors of ARRIS accept
responsibility for the information contained in this document and,
to the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case), the information
contained in this document is in accordance with the facts and it
does not omit anything likely to affect the import of such
information.
ARRIS and the ARRIS Logo are trademarks or registered trademarks
of ARRIS Enterprises, Inc. All other trademarks are the
property of their respective owners. © ARRIS Enterprises, Inc.
2015. All rights reserved.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/arris-to-acquire-pace-plc-for-21-billion-in-stock-and-cash-300070526.html
SOURCE ARRIS Group, Inc.