ARRIS will acquire BigBand Networks (NASDAQ: BBND) for $2.24 per share in cash, equating to approximately $172 million, or $53 million net of estimated BigBand cash on hand.
ARRIS said the acquisition will help it to better address upcoming video network evolution opportunities with a more complete offering. These opportunities include the Converged Cable Access Platform (CCAP) architecture defined by CableLabs, Local and Targeted Advertising, IP Video Distribution, and Advanced Video Processing and Compression.
BigBand, which is based in Redwood City, California, supplies a range of video-networking and ad-insertion platforms for IPTV operators and cable operators.
Upon closing, ARRIS plans to cut costs at BigBand by eliminating public company expenses and the alignment of sales, marketing, and R&D initiatives. ARRIS also anticipates that the transaction will be neutral to accretive on a non-GAAP basis for ARRIS shareholders by mid-2012 and will offer upside potential thereafter.
"We are both enthusiastic and optimistic about the BigBand acquisition because it builds on our stated business strategy of growing our current businesses into a more complete portfolio including a strong video product suite and investing in the evolution towards network convergence onto an all IP platform," said Bob Stanzione, ARRIS Chairman & CEO. "In addition, the acquisition offers new opportunities to expand our customer base worldwide. We are delighted to welcome the BigBand employees to ARRIS."
The board of directors of BigBand has unanimously recommended that the shareholders of BigBand accept the offer. Redpoint Ventures and ValueAct Capital Partners, holders of 32% of the outstanding shares of BigBand, have agreed to tender their shares in the offer and to vote their shares in favor of the merger agreement and against any other transaction, subject to the provisions of the agreement. Completion of the transaction is expected to occur in late 2011.http://
- For Q2 2011, BigBand reported total revenues of $19.8 million as compared to $26.4 million reported in the second quarter of 2010. GAAP net loss for the second quarter of 2011 was $8.2 million, or ($0.12) per share, compared to GAAP net loss of $9.6 million, or ($0.14) per share, reported in the second quarter of 2010.
- BigBand was founded in 1998 and completed its IPO in March 2007.
- In 2004, BigBand Networks acquired the IP Cable Business Unit of ADC Telecommunications, including its Cuda CMTS and FastFlow product lines.
