Arris to buy Yorkshire set-top box maker Pace in $2.1bn deal
Communications equipment maker Arris Group Inc will buy British set-top box maker Pace Plc in a $2.1bn cash-and-stock deal to expand into the satellite businessand boost its business outside North America.
Pace shareholders will receive 1.325 pounds ($2) in cash and 0.1455 new Arris shares for each share held, the companies said last night.
Arris will fund the cash portion of the deal through a combination of cash and debt. The company said it had secured a loan from Bank of America Merrill Lynch to fund the transaction.
On a pro forma basis, current Arris shareholders will hold about 76 percent shares in the combined company, with Pace shareholders holding the rest.
The deal, expected to close by the second half of the year, is expected to add to Arris’ adjusted earnings.
Evercore and BofA Merrill Lynch are Arris financial advisers for the deal, Troutman Sanders is its lead US legal counsel and Herbert Smith Freehills is its lead UK legal counsel.
J.P. Morgan Cazenove is Pace’s lead financial adviser and Travers Smith is its lead legal counsel.
The combined group is expected to boast revenues of close to $8bn and will employ more than 8,500 people in over 15 countries.
Pace, whose key customers include US firms Comcast, AT&T and DirecTV, saw pre-tax profits rise 34.3 per cent to $175.7m last year, while revenues climbed 6.1pc to $2.6bn.
The 23-year-old company expects sales of $2.75bn this year and adjusted earnings before interest, tax and amortisation of $255m. 255m$255m, higher than analysts’ expectations.