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BigBand Acquires Arris's M&A Guy

Is BigBand Networks Inc. (Nasdaq: BBND) preparing for a big M&A push?

It appears that the digital video specialist may indeed be on the hunt for fresh game after hiring Rajive Dhar, formerly the senior vice president of M&A at Arris Group Inc. (Nasdaq: ARRS), where he played a key role in that company's thrifty acquisitions of C-COR Inc., EGT Inc., and, most recently, Digeo Inc. (See Arris Digs Digeo , Arris Gets EGT for a Song , and Arris Sews Up C-COR.)

BigBand and Arris aren't commenting on Dhar's move, but Cable Digital News has learned from multiple sources that his first day at BigBand is either today or Friday. His exact title at BigBand is not yet known, but he is to report to CEO and president Amir Bassan-Eskenazi.

People familiar with the move expect Dhar to continue his M&A role at BigBand but also take on a more day-to-day business role, since he'll be working at the company's Redwood City, Calif., headquarters. At Arris, Dhar worked about 2,000 miles away from that company's corporate base in Suwanee, Ga. He joined Arris in 2003 through its purchase of optical packet node specialist Atoga Systems. (See Arris Gobbles Atoga and Arris Closes Atoga Acquisition.)

As for the M&A portion of his new job, it's expected that Dhar will help BigBand develop a longer-term vision and seek out incremental acquisition opportunities that will help the company increase its revenues and diversify its customer base, as the latter is occasionally viewed as a weakness that needs addressing. Some analysts have likewise questioned how long BigBand can rely on technologies like switched digital video (SDV) to drive growth there. (See Has Cable SDV Peaked? )

At the end of the third quarter, Bright House Networks , Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Verizon Communications Inc. (NYSE: VZ) each accounted for greater than 10 percent of the vendor's revenues. TWC, the largest of that group, represented more than 30 percent of revenues. BigBand pulled in $22.2 million in the third quarter, down from $48.3 million in the year-ago period. BigBand ended the period with $41.8 million in deferred revenue. (See BigBand Posts Q3.)

It's not known whether BigBand, a champion of SDV and a new line of cable IPTV and service convergence products, has any potential acquisitions already in mind. RGB Networks Inc. could offer such an opportunity despite some product overlaps, but that company has indicated that it's in hot pursuit of an initial public offering. (See BigBand Pushes IP Video Convergence, BigBand Lays Cable IPTV Groundwork, RGB Remakes Itself for Global Growth .)

However, it's understood that BigBand, under Dhar's guidance, with his track record for finding bargains, will pursue small, private companies. And it will likely pay cash, rather than throw stock, at any deals it does pursue. BigBand ended the third quarter with $161.6 million in cash and cash equivalents.

Dhar's move to BigBand also dampens previous speculation that the company was on the block. (See BigBand OKs 'Change of Control' Exec Packages and BigBand for Sale?)

Dhar's departure from Arris, meanwhile, is a signal the company may be taking an M&A breather as it digests Digeo, EGT, and other recent purchases, though it's said that Arris already has some internal candidates in mind to succeed Dhar.

— Jeff Baumgartner, Site Editor, Cable Digital News

Jeff Baumgartner 12/5/2012 | 3:50:41 PM
re: BigBand Acquires Arris's M&A Guy

BigBand confirmed the hiring and that Dhar's title is SVP of of corporate development and strategic planning, and that he is indeed reporting to CEO & president Amir Bassan-Eskenazi. Now, we'll have to figure out what it all means...JB

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