Bernard and Thread- Some pretty big news out of NT/ANTC. I'm not sure what to make of it yet. -MikeM(From Florida)
**********************
quote.bloomberg.com
Nortel Networks, ANTEC to Create Global Broadband Cable Access
ANTEC to Expand Leadership Position Under New Name - Arris, Inc.
BOSTON, Mass. and DULUTH, Ga., Oct. 18 - Nortel Networks Corporation and ANTEC today announced an agreement to realign their cable businesses to create a new company to lead the broadband cable access industry. The new company will acquire Nortel Networks ownership interest in Arris Interactive, a leading developer of broadband cable access technology and solutions. Upon closing, the new company will be renamed Arris, Inc., to signify its focus on leadership in driving the broadband local access revolution.
Nortel Networks will effectively transfer to the new company its 81.25 percent interest in Arris Interactive in return for 33 million shares of common stock in the new company and approximately US$325 million in cash, giving Nortel Networks an approximate 46.5 percent ownership interest. ANTEC, which will become a subsidiary of the new company, currently owns the remaining 18.75 percent of Arris Interactive. Nortel Networks and the new company will continue to work together to offer customers the best end-to-end solutions for the cable market.
Nortel Networks will continue to focus on delivering end-to-end solutions for broadband cable networks, including its world-leading Optical Internet solutions, Nortel Networks Succession(x) solutions for next generation voice services, solutions for routing and content, and Nortel Networks Preside(x) service enabling solutions for network, service and subscriber management.
"This realignment will make visible for the first time the tremendous value we and ANTEC have built inside Arris Interactive in five short years," said Steve Pusey, vice president, Nortel Networks and chairman, Arris Interactive. "With the new combined business offering leading solutions for broadband access, Nortel Networks will reinforce its position as a leading provider of end-to-end, high-performance Internet solutions for the cable industry,"
A 'Hairpin Turn' for ANTEC
Following closing of this transaction, the new, combined business will focus on the enormous opportunity of bringing the Internet and next generation services to the cable market. The new company intends to leverage its broad research and development capabilities and the vast international acceptance for Arris Interactive products and solutions, as well as its current offerings in optical, radio frequency (RF) and network powering products for hybrid fiber-coaxial (HFC) system operators worldwide.
"This transaction represents a 'hairpin turn' for ANTEC as we position ourselves to lead the charge to broadband," said Bob Stanzione, president and chief executive officer, ANTEC. "This transaction will simplify the relationship with our customers, give us the broadband local access technologies our customers require, and enable us to gain Nortel Networks as a major shareholder and global marketing ally."
Based in Suwanee, Georgia, near Atlanta, Arris Interactive was formed by Nortel Networks and ANTEC in 1995 to focus on next generation cable solutions. It has approximately 395 employees and its product portfolio includes Cornerstone and Packet Port, the market-leading products in cable telephony and combined Internet access and cable telephony respectively. Arris had revenues of US$329 million last year. In the first half of 2000, Arris Interactive recorded revenues of US$254 million, an increase of 142 percent over the year-earlier period. About one-half of Arris Interactive revenues during these periods were from sales to ANTEC.
Together, ANTEC and Arris Interactive are already the global leaders in cable telephony with a 70 percent market share, according to a report published in May 2000 by Cahners In-Stat. Cahners In-Stat also expects the cable telephony market to grow from an estimated US$293 million last year to US$7 billion in 2004.
"Together, Nortel Networks and the new company will offer a broad, end-to- end solution for cable providers seeking to enter the new world," Pusey said. "This realignment will give the combined business the depth of skills and resources to lead its market. And it will enable Nortel Networks to focus on building a set of Local Internet solutions with the speed, performance, reliability and economics to conquer the 'last mile' bottleneck and deliver new, intelligent, high-performance Internet services to millions of homes and businesses."
The deal is expected to close in the first quarter of 2001, and is subject to customary regulatory approvals and approval by ANTEC shareholders. The transaction (excluding any one-time gains) is expected to be neutral to Nortel Networks earnings per share from operations in calendar year 2001. The acquisition is not expected to impact Nortel Networks previously announced 2000 and 2001 financial guidance. |
