DOJ Seeks More Data from Arris-Pace Deal

Tuesday, Jun 30, 2015

Arris and Pace said they have each received requests for additional info from the U.S. Department of Justice in connection to Arris’s proposed $2.1 billion acquisition of the U.K.-based maker of set-tops, broadband gear and software products.    

Arris and Pace said the “Second Request” from the DoJ is part of the regulatory process under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and that they “intend to respond to the requests as quickly as practicable and to continue to work cooperatively with the DOJ in connection with its review.”   

They said the effect of the Second Request is to extend the waiting period imposed by the HSR Act until 30 days after each company has substantially complied with its Second Request, unless that period is extended voluntarily by the companies or terminated sooner by the DOJ.   

Arris said it “continues to anticipate that the transaction will close in late 2015.”   Arris announced the deal on April 22, claiming that the proposed marriage would accelerate its growth strategy, enable it to generate more scale and create a combined company with $8 billion in pro forma revenues.   

Once completed, the deal will result in the formation of  “New Arris,”  a new holding company that will be incorporated in the U.K., and have its operational and worldwide headquarters based in Suwanee, Ga. Arris shareholders are to hold about 76% of New Arris, versus 24% for Pace shareholders.   

Arris expects to continue to trade on the NASDAQ under the “ARRS” ticker. According to an 8-K filing with the SEC, Arris is subject to a break-up fee of up to $20 million.    

Arris and Pace generated 25% of global revenues in the set-top category for all of 2014, according to data from Infonetics Research.

Though Pace is primarily known as a set-top box supplier, expanded into the access network technology business in the fall of 2013 via a $310 million deal for Aurora Networks, a company that has been operating as a strategic business unit of Pace.

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