Light Reading
Arris is paying $2.24 per share for the struggling switched digital video specialist

Arris Snaps Up BigBand

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
10/11/2011
50%
50%

Arris Group Inc. (Nasdaq: ARRS) is paying $2.24 per share, equivalent to a total of US$172 million, to acquire switched digital video (SDV) specialist BigBand Networks Inc. (Nasdaq: BBND). (See Arris to Buy BigBand.)

The deal won't cost Arris that much, though, as BigBand has an estimated $119 million in cash. As a result, Arris will effectively be spending $53 million on BigBand.

The deal represents a 76 percent premium on BigBand's share price of $1.27 at the end of trading Monday. Not surprisingly, BigBand's stock is up 75 percent to $2.22 in pre-market trading Tuesday morning. Arris's share price ended Monday at $11.52.

Arris believes it can cut significant costs from Bigband's current operating expenses and expects the BigBand business to be adding to its earnings by mid-2012. BigBand reported a net loss of $8.2 million and revenues of $19.8 million for the second quarter of this year. (See BigBand Reports Q2.)

The deal gives Arris the market leader in the SDV sector, but it also gets BigBand's dense edge QAM technologies, targeted advertising gear and systems designed to help cable operators migrate to an IP video architecture.

"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 Arris Chairman and CEO Bob Stanzione in the press release announcing the deal.

BigBand and Arris have been working on equipment designed to support Converged Cable Access Platform (CCAP) (formerly known as Converged Multiservice Access Platform (CMAP)), an emerging, super-dense access architecture that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and other major MSOs will tap to aid their migration to an all-IP infrastructure. (See BigBand Plots Plans for Comcast's CMAP.)

Speculation that BigBand was up for sale has been circulating for at least three years. (See AT&T Deal Boosts BigBand, BigBand IPO: Boing! and BigBand OKs 'Change of Control' Exec Packages .)

The companies will conduct a conference call Tuesday morning to offer more details about the deal.

Why this matters
The sale offers an exit for BigBand, which went public in 2007 but has struggled to grow its business in recent quarters. However, a recent win at AT&T Inc. (NYSE: T) showed some promise for its ad-insertion technology. Arris and BigBand have some overlapping products, such as edge QAMs, but the addition of BigBand will let Arris play a larger role with SDV, give it a switching fabric that MSOs can use for IP video and enhance its video ad-insertion capabilities.

The acquisition is yet another bargain for Arris, which paid $20 million for Paul Allen's set-top and software firm Digeo Inc. (See Arris Starts to Make Hay on Digeo Deal .)

For more
Read more about BigBand.

— Jeff Baumgartner, Site Editor, Light Reading Cable



(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
AESerm
50%
50%
AESerm,
User Rank: Light Beer
12/5/2012 | 4:51:30 PM
re: Arris Snaps Up BigBand


So maybe that's why things seem to have gotten quiet over the past month or so among the Redwood City crowd. A good combination, ever-larger portfolio for the savvy ARRS sales team. And maybe a homecoming of sorts for BBND brain and former ARRS exec Rajive Dhar?

craigleddy
50%
50%
craigleddy,
User Rank: Blogger
12/5/2012 | 4:51:30 PM
re: Arris Snaps Up BigBand


Looks like another sign of Arris's increasing role in cable and BigBand's unfortunate decline. Both of these companies have a lot of forward-thinking people in them, so cable should benefit from their (pardon me for using this word) synergy as the industry continues its migration to all-IP service delivery.

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:51:29 PM
re: Arris Snaps Up BigBand


I don't know if we should expect to see any rival bids come in, but the lawyers are already giving this deal the smell test. .


Levy & Korsinsky has launched an investigation concerning "whether the BigBand Board of Directors breached their fiduciary duties to BigBand stockholders by failing to adequately shop the Company before entering into this transaction and whether ARRIS Group, Inc. is underpaying for BigBand shares, thus unlawfully harming BigBand stockholders."


Not uncommon to see this sort of thing, but it didn't take them long to pull the trigger on deal probe.  JB


 


 

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:51:29 PM
re: Arris Snaps Up BigBand


I forgot about that personnel move, back in 2009.  On the call, today they spent alot of time talking about how Arris would integrate BBND's technology and how it would fit into the near-term/long-term product strategy, but nothing said about how many BBND folks will be joining Arris post-deal. JB

Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (0) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
LRTV Huawei Video Resource Center
Add SmartSense to Make Your Network Ready for 4K

10|27|14   |   3:23   |   (0) comments


To make current networks ready for the coming 4K TV challenges, Huawei SmartSense solution will conveniently add experience and operation capabilities to boost telcos' future business.
LRTV Huawei Video Resource Center
NetMatrix: Orchestrate the SDN & NFV World

10|27|14   |   4:11   |   (0) comments


Orchestrator is important in SDN/NFV world to make Telcom network automate, open and efficient. NetMatrix, as Huawei SDN/NFV orchestrator solution, has been in deployment and is showing its' value in real scenarios.
LRTV Huawei Video Resource Center
Huawei FusionSphere Enabling ICT Transformation

10|27|14   |   3:21   |   (0) comments


Jeffrey Gao, Chief Strategy and Marketing Officer of Huawei West Europe Region, talks about the company's future-oriented cloud strategy. Huawei is providing full portfolio of IT architecture and building an open cloud ecosystem with innovative cloud OS FusionSphere to support customers' ICT transformation.
LRTV Huawei Video Resource Center
Huawei Partner Interview: StorIT

10|27|14   |   4:20   |   (0) comments


An interview with Suren Vendantham of StorIT, a value-added distributor for Huawei in the Middle East region.
LRTV Huawei Video Resource Center
Huawei Partner Interview: Optimus

10|27|14   |   3:14   |   (0) comments


An interview with Nehul Goradia of Optimus, a value-added distributor for Huawei in the Middle East.
LRTV Huawei Video Resource Center
Huawei Partner Interview: Enterprise Solutions

10|27|14   |   4:57   |   (0) comments


An interview with Pouya Parsafar of Enterprise Solutions, a valued distributor partner with Huawei.
LRTV Huawei Video Resource Center
Huawei Customer Interview: OETC

10|27|14   |   2:35   |   (0) comments


An interview with Saif Albadi, of the Oman Electricity Transmissions Company, a government utility in that company that partners with Huawei.
LRTV Huawei Video Resource Center
Huawei Customer Interview: Jannah Hotels & Resorts

10|27|14   |   3:13   |   (0) comments


An interview with Nehmeh Darwish, CEO of Jannah Hotel & Resorts, about his collaboration with Huawei across five hotels in the United Arab Emirates.
LRTV Huawei Video Resource Center
Huawei's Commitment to the Middle East: GITEX 2014 Wrap-up

10|27|14   |   3:41   |   (0) comments


Highlights from the Huawei pavilion at GITEX in Dubai, United Arab Emirates, with interviews with current Huawei customers.
LRTV Huawei Video Resource Center
Huawei: GITEX 2014 Day 1 Highlights

10|27|14   |   2:58   |   (0) comments


Highlights from the Huawei pavilion at GITEX (Gulf Information Technology Exhibition), an annual computer and electronics trade show and conference in Dubai, United Arab Emirates.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
AT&T: Merger Review Halt Won't Hurt Us
Alan Breznick, Cable/Video Practice Leader, 10/23/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Roku Raises $25M, But for What?
Mari Silbey, Independent Technology Editor, 10/23/2014
Like Us on Facebook
Twitter Feed