Arris Bids $730M for C-COR
The deal, announced Sunday night, amounts to $13.75 per share, or about a 39 percent premium over C-COR's closing price Friday. C-COR is coming off a down month, however; Arris's press release notes the price is just 19 percent higher than C-COR's 30-day trading average.
The deal would give Arris a foothold in video on demand and potentially, in switched digital video (SDV). (See C-COR Sets Sights on SDV.)
While C-COR might be a worthy acquisition target, Arris has to feel like it was nominated for an Oscar and wound up with a Grammy. In February, Arris had seemingly wrapped up a purchase of Tandberg TV, only to get outbid by Ericsson AB (Nasdaq: ERIC). (See Ericsson Offers $1.4B for Tandberg TV.)
At that point, some analysts expected Arris to chase smaller game. One possibility could have been Terayon Communication Systems Inc. -- but Arris had stopped courting Terayon once the Tandberg TV deal looked solid. Terayon ended up in the hands of Motorola Inc. (NYSE: MOT) instead. (See Motorola Seals Up Terayon .)
An acquisition still seemed a likely route for Arris, which had been hoping to branch out from cable TV equipment into the world of video. C-COR was on the shortlist of candidates. (See Arris Mulls Next Move.)
Arris and C-COR have both seen their stocks slide since July. Arris closed at $14.26 Friday, compared with a 52-week high of $17.89. C-COR has fallen more dramatically, with shares down nearly 40 percent from a July peak of $16.00.
C-COR, in particular, has seen growth stall lately.
For its first quarter, which ends this month, analysts polled by Reuters Research expect C-COR to report revenues of $74 million. That's up from $69.6 million in last year's first quarter, but down from $74.4 million in the June quarter and $82.7 million in the March quarter.
C-COR remains profitable, with analysts predicting non-GAAP net income of 18 cents per share, up from 17 cents the previous quarter. To help the bottom line, C-COR sold its outside plant business in June and handed off some OSS assets to Sigma Systems last year. (See C-COR Divests Outside Plant Unit.)
Arris and C-COR have scheduled a press conference for 8:30 a.m. Eastern time Monday, at which time executives are expected to address crucial questions, such as who will pick the catering for that swank Global IP Summit. (See Slideshow: C-COR Global IP Summit .)
— Craig Matsumoto, West Coast Editor, Light Reading