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9/23/2007 - Suwanee, GA: 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:
Creates the leading pure play cable solutions company with over $1.2
billion in sales over the past twelve months
Expands ARRIS' product portfolio and addressable market and enhances
its video growth opportunities
Improves competitive positioning versus diversified industry suppliers
Diversifies revenue across core customer relationships and enables
deeper participation in network infrastructure capacity spending
Creates a global technologically diverse engineering team with a
broader and stronger platform from which to drive portfolio expansion
Enhances financial profile with improved margin expansion
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."
UBS Investment Bank is acting as financial advisor and Troutman Sanders
LLP is acting as legal advisor to ARRIS in connection with the transaction.
Merrill Lynch & Co. is acting as financial advisor and Ballard Spahr
Andrews & Ingersoll, LLP is acting as legal advisor to C-COR.
Conference Call and Webcast
A joint conference call and webcast with a presentation and discussion
of this transaction will be held at 8:30 AM. Eastern Time, September 24,
2007. The conference call will be broadcast live via the Internet at:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=87823&eventID=1657032
(To view this web page, copy and paste the URL into your browser.)
Presentation materials for the call will also be available for viewing
at both the ARRIS (http://www.arrisi.com and C-COR (http://www.c-cor.com) Investor
Relations websites. Those wishing to participate in the conference call via
the telephone may dial-in at 800-329-9097, international (617) 614-4929,
access code: 72341588. A telephone replay will be available from 10:30 am
Eastern Time on September 24, 2007 through midnight, Eastern Time October
01, 2007 by dialing 888-286-8010, international (617) 801-6888 access code:
26425626. The conference call replay will also be available via webcast
through the ARRIS Investor Relations website at http://www.arrisi.com and the
C-COR Investor Relations website at http://www.c-cor.com.
About ARRIS
ARRIS provides broadband local access networks with best-in-class
video, high-speed data, mobile and fixed-line telephony systems for the
delivery of voice, video and data to their residential and small-to-medium
sized business customers. ARRIS complete solutions enhance the reliability
and value of converged services from the network to the end-user.
Additionally, ARRIS provides a complete set of tools and cable system
infrastructure products. Headquartered in Atlanta, Georgia, USA, ARRIS has
R&D centers in Atlanta, Chicago, Cork, Ireland and Shenzhen, China and
operates support and sales offices throughout the world. ARRIS common stock
is listed on the NASDAQ Global Market (Symbol: ARRS). For additional
information regarding ARRIS, visit http://www.arrisi.com.
About C-COR
C-COR enables its global customer base to confidently grow, manage and
deliver next-generation products and services to consumers. The Company's
integrated access and management platforms deliver highly reliable and
flexible voice, video and data, and support quick launch and cost effective
scaling of new services. C-COR's common stock is listed on the NASDAQ
Global Market (Symbol: CCBL). For additional information regarding C-COR,
visit http://www.c-cor.com.
Forward-Looking Statements
This press release contains forward-looking statements. These
statements discuss, among others, plans for future products; growth in the
cable equipment market; growth in demand for high speed access, statements
regarding performance following completion of the acquisition; including
with respect to financial profile and margins, the ability to drive
strategic benefits; and the timeframe during which the acquisition is
expected to close. Statements regarding future events are based on the
parties' current expectations. The statements in this presentation that use
such words as "believe," "expect," "intend," "anticipate," "contemplate,"
"estimate," or "plan," or similar expressions are also forward-looking
statements. Actual results may differ materially from those contained in
any forward looking statement. Specific factors that could cause such
material differences include, among other things, shareholder approval of
the acquisition, regulatory approval of the acquisition, the potential
impact on the business of C-COR due to uncertainty about the acquisition,
the retention of employees of C-COR, the ability of ARRIS to successfully
integrate C-COR's opportunities, technology, personnel and operations, and
customer demand for our products. The above listing of factors is
representative and is not intended as an all-encompassing list of such
factors. For additional factors please see our Form 10-Q for the quarter
ended June 30, 2007. We disclaim any obligation to update forward-looking
statements, whether as a result of new information, future events or
otherwise.
Additional Information and Where to Find It
In connection with the proposed combination of ARRIS and C-COR, ARRIS
will file with the SEC a registration statement on Form S-4, which will
include a proxy statement of C-COR and a proxy statement and prospectus of
ARRIS. Shareholders are urged to read the joint proxy statement/prospectus
regarding the proposed transaction when it becomes available, because it
will contain important information. Shareholders will be able to obtain a
free copy of the joint proxy statement/prospectus, as well as other filings
containing information about ARRIS and C-COR, without charge, at the SEC's
internet site (http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the filings with the SEC that will be incorporated
by reference in the joint proxy statement/prospectus can also be obtained,
without charge, by directing a request to
ARRIS Group Inc
3871 Lakefield Drive
Suwanee, Georgia 30024
Attention: Investor Relations
(678)
473-2647
or to
C-COR
60 Decibel Road
State College, Pennsylvania 16801
Attention: Director of Investor Relations
(800) 233-2267 ext. 4402.
Participants in the Solicitation
ARRIS, C-COR and their respective directors and executive officers and
other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed combination. Information regarding
ARRIS' directors and executive officers is available in the Proxy Statement
with respect to ARRIS' 2007 Annual Meeting of Stockholders filed by ARRIS
with the SEC on April 9, 2007. Information regarding C-COR's directors and
executive officers is available in the Proxy Statement with respect to
C-COR's 2006 Annual Meeting of Stockholders filed by C-COR with the SEC on
September 15, 2006. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in the
joint proxy statement/prospectus and other relevant materials to be filed
with the SEC when they become available.
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