Arris Group Inc. agreed to buy the British communications
company Pace PLC for $2.1 billion in stock and cash, in a deal that
offers tax advantages by moving the new company to the U.K.
The price of GBP1.325 and 0.1455 shares for each Pace share is a
28% premium to the Pace closing share price on April 21.
The companies expect the deal to add between 45 cents and 55
cents to Arris's per-share earnings in the first year after the
acquisition.
Arris, currently based in Georgia, supplies broadband services
for subscribers. Pace develops technology for broadband as well.
The two companies will have about $8 billion in pro forma revenues
and 8,500 combined employees globally.
"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," Arris Chief
Executive Bob Stanzione said.
The new company will be incorporated in the U.K., with
operational and world-wide headquarters in Suwanee, Ga. As such, it
is a so-called tax inversion deal, in which an American company
moves its tax home to a country where corporate taxes are lower.
The deal will reduce the company's tax rate to about 26% to
28%.
Arris will fund the deal through cash and debt.
The transaction has been approved by both boards.
Shares of Arris are up about 14% over the past 12 months through
Tuesday's close.
Write to Angela Chen at angela.chen@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires