Arris Acquires C-COR

SUWANEE, Ga. and STATE COLLEGE, Pa. -- ARRIS Group Inc. (Nasdaq: ARRS) and C-COR Incorporated (Nasdaq: CCBL) announced today that they entered into a definitive agreement whereby ARRIS will acquire C-COR for a purchase price of approximately $730 million in a mix of cash and ARRIS stock. With over 250 customers around the world, the companies collectively reported revenues of over $1.2 billion over the past twelve months and the merged company will be the largest pure-play provider of equipment and solutions to the cable industry.

As cable operators, telcos and satellite TV providers compete for subscribers, the triple play of voice, data and video, and the eventual quad play with mobile, is driving an increased demand for bandwidth and the need for advanced video management solutions. Additionally, as new services such as IP telephony, high definition television and on-demand television emerge, the pressure on bandwidth will increase further, pushing network capacity requirements higher and higher. These trends support the combination of ARRIS and C-COR and will drive the future success and growth of the new company with its highly scalable, revenue producing technologies for high speed data, telephony, optical and network access infrastructure and video management solutions.

The combination of ARRIS and C-COR:

Transaction Terms

Under the terms of the definitive agreement, approved by the Boards of Directors of both companies, each share of common stock of C-COR will be converted into the right to receive, at the election of each of the individual holders of C-COR shares, either (i) a cash payment of $13.75 or (ii) 0.9642 shares of ARRIS, subject to pro ration if the elections exceed approximately 51% in cash or 49% in stock. The stock component of the consideration is subject to a collar if the average price of ARRIS stock for a ten trading day period ending three days prior to closing is greater than $15.69 or less than $12.83.

The merger consideration of $13.75 per C-COR share represents approximately a 19% premium to the 30 day trading average of C-COR common stock and a 39% premium to the closing price of C-COR common stock on September 21, 2007. Subject to affirmative approval of both ARRIS and C-COR shareholders, Hart-Scott-Rodino approval and other clearances, the transaction is expected to close in January 2008.

Bob Stanzione, ARRIS Chairman and CEO, said, "ARRIS and C-COR have had a long standing business relationship. The complementary nature of our portfolios has led us to interact often in supporting our common customers. The combination of our two businesses will create the leading pure play solutions provider to the global cable industry offering a full suite of IP telephony, high speed data, video infrastructure and video management solutions. The combined company will be extremely well positioned to deliver cross-platform solutions aimed at key customer spending initiatives including switched digital video, next generation video on-demand and digital advertising infrastructure. The combination also enables us to build on our leadership positions in cable IP telephony, cable optical and access infrastructure and cable modem termination systems. Further, this combination will allow us to be at the forefront of innovation within our industry and will enable us to introduce products and solutions that neither company would be able to develop alone.”

David Woodle, Chairman and CEO of C-COR, said, "ARRIS' proven track record, complementary market positions, strong balance sheet and stellar industry reputation make the combination attractive for our customers, shareholders and employees. Combining these two companies allows us to transcend what we have accomplished individually." Woodle added, "ARRIS is the best strategic partner for C-COR, allowing us to better serve our worldwide customers with an extensive footprint and as a result we are extremely excited about the potential of this combined company going forward and the value creation it represents. Moreover, with the significant stock component offered in the transaction, C-COR's shareholders have a meaningful opportunity to participate in realization of that value."

“We anticipate that the transaction will improve our financial profile, in particular our gross margins”, said David Potts, Chief Financial Officer, ARRIS. “Our combined customer profile also provides us with significant cross selling opportunities. Furthermore, we anticipate that the combined company should enjoy the advantages of economies of scale. With respect to the capital structure, very importantly, the transaction was structured to ensure that the combined company will have a robust balance sheet to support operations and provide the flexibility to pursue other strategic initiatives.”

Arris Group Inc. (Nasdaq: ARRS)