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 Custom TV
Using Service Quality to Drive WiFi Monetization

10|22|14   |   6:51   |   (0) comments


Live from the SCTE conference: Heavy Reading's Alan Breznick explores the forces shaping the WiFi opportunity in an interview with CableLabs' Justin Colwell and Amdocs' Ken Roulier.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
Upcoming Live Events
October 29, 2014, New York City
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
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
Analysts Warn of Major NFV Gaps
Carol Wilson, Editor-at-large, 10/22/2014
Is Health the Killer App for the IoT?
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/22/2014
Drones Hover Over the IoT Sector
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/23/2014
The Human Gain of the Smart Home
Robin Mersh, 10/20/2014
Zayo Zooms Out of the IPO Gate
Dan O'Shea, Managing Editor, 10/17/2014
Like Us on Facebook
Twitter Feed