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Comcast to Plow $150M Into Arris

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
1/15/2013
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Comcast Corp. will end up with an almost 8 percent stake in Arris Group Inc. once the vendor successfully completes its US$2.35 billion acquisition of Motorola Mobility LLC's Home unit from Google.

The agreement, announced Monday, calls for Arris to sell 10.6 million shares of its common stock, valued at $150 million, to Comcast. The deal will reduce the number of shares Arris was originally slated to issue to Google while increasing the cash paid to Google by $150 million.

If the deal gets done, Comcast and Google will each own about 7.85 percent of the outstanding Arris shares upon the closing of the transaction based on Arris's current capitalization. Under the original deal, comprising $2.05 billion in cash and $300 million in newly issued Arris stock, Google was to get a 15.7 percent interest in Arris. Google and Arris expect their agreement to close by April.

Why this matters
The investment, though immaterial to Comcast, indicates the strategic importance the operator is placing on one of its largest suppliers of set-tops and other broadband equipment. The deal also puts Comcast and Google on equal footing at the combined company when Arris completes its acquisition of Motorola Home.

For more



— Jeff Baumgartner, Site Editor, Light Reading Cable



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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/16/2013 | 3:28:05 PM
re: Comcast to Plow $150M Into Arris
One of the first things that crossed my mind was:-Will this sort of investment put other vendors (perceived or otherwise) at a disadvantage when it comes to getting biz at Comcast?- The same could be said for any startup that gets VC money from Comcast Ventures, but that has not always meant an automatic deal.- Any cable vendors out there that care to share an opinion on what it means for you -- good, bad, or otherwise? JB
craigleddy
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craigleddy,
User Rank: Blogger
1/16/2013 | 2:36:35 PM
re: Comcast to Plow $150M Into Arris
Yea, MSOs have made a lot of VC-like investments and joined in JVs to back suppliers and startups, but I can't recall a stock acquisition like this one, especially in a major cable supplier. It may be unprecedented in cable lore. Can anyone else recall an MSO-supplier stock deal like this? - -
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/16/2013 | 12:57:09 PM
re: Comcast to Plow $150M Into Arris
I can't recall any...unless TCI did anything like this with Telewire back in the day.- Comcast's VC unit invests in a lot of vendors but most of those investments are in the single-digit millions, so this appears to be quite a bit different.
craigleddy
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craigleddy,
User Rank: Blogger
1/15/2013 | 7:17:02 PM
re: Comcast to Plow $150M Into Arris
Has an MSO ever made a direct stock acquisition in a major cable supplier like this before?-
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