EX-99.2 7 d913832dex992.htm EX-99.2 EX-99.2
ARRIS TO ACQUIRE PACE PLC
APRIL 22
nd
2015
Exhibit 99.2


SPEAKING TODAY
BOB STANZIONE
ARRIS
CHAIRMAN & CEO
DAVID POTTS
ARRIS
EVP & CFO
BRUCE MCCLELLAND
ARRIS
PRESIDENT –
NETWORK,
CLOUD & GLOBAL SERVICES
LARRY ROBINSON
ARRIS
PRESIDENT –
CPE
22 April 2015
2
MIKE PULLI
PACE
CEO
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


SAFE HARBOR
22 April 2015
3
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
No Offer or Solicitation
This document is provided for informational purposes only and does not constitute an offer to sell, or an invitation to
subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction
in contravention of applicable law.
Forward Looking Statements
This presentation contains forward looking statements.  These statements include, among others, statements
concerning projections of revenues, income and other financial items; plans for future performance of ARRIS following
the completion of the Pace acquisition, ARRIS’ ability to drive the strategic benefits outlined; and the time frame
during which the acquisition will close.  Statements regarding future events are based on the parties’ current
expectations.  Actual results may differ materially from those contained in any forward-looking statement.  Forward-
looking statements are necessarily subject to associated risks related to, among other things, successful completion of
the acquisition process including receipt of necessary regulatory approvals and the approval of Pace and ARRIS
shareholders; the potential impact on ARRIS’ and Pace’s respective businesses due to uncertainty about the acquisition;
the retention of employees of Pace; the ability of ARRIS to successfully integrate Pace’s opportunities, technology,
personnel and operations; ARRIS’ inability to achieve expected synergies within the expected timeframes or at all; and
changes in tax laws or interpretations that could increase ARRIS’ consolidated tax liabilities, including, if the transaction
is consummated, changes in tax laws that would result in New ARRIS being treated as a domestic corporation for U.S.
federal tax purposes.   Other factors that could cause results to differ from current expectations include: the uncertain
current economic climate and financial markets; and their impact on ARRIS’ customers’ plans and access to capital: the
impact of rapidly changing technologies; the impact of competition including on product development; the ability of
ARRIS to react to changes in general industry and market conditions; rights to intellectual property and the current
trend toward increasing patent litigation, market trends and the adoption of industry standards; and consolidations
within the broadband communications industry of both the customer and supplier base.  These factors are not
intended to be an all-encompassing list of risks and uncertainties that may affect the Company’s business. Additional
information regarding these and other factors can be found in ARRIS’ reports filed with the Securities and Exchange
Commission, including its Form 10-K for the year ended December 31, 2014.  In providing forward-looking statements,
the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether as a result
of new information, future events or otherwise.


SAFE HARBOR
Important Additional Information and Where You Can Find It
It
is
expected
that
the
shares
of
New
ARRIS
to
be
issued
to
Pace
shareholders
in
the
U.K.
law
scheme
of
arrangement
transaction that forms a part of the transaction will be issued in reliance upon the exemption from the registration
requirements
of
the
Securities
Act
of
1933,
as
amended,
provided
by
Section
3(a)(10)
thereof.
In connection with the issuance of New ARRIS shares to ARRIS shareholders pursuant to the merger that forms a part
of the transaction, ARRIS will file with the SEC a registration statement on Form S-4 that will contain a prospectus
of New ARRIS as well as a proxy statement of ARRIS relating to the merger that forms a part of the transaction, which
we refer to together as the Form S-4/Proxy Statement.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE FORM S-4/PROXY STATEMENT, AND OTHER
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION CAREFULLY AND IN THEIR ENTIRETY,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE
TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION.
Those
documents,
if
and
when
filed,
as
well
as
ARRIS’
and
New
ARRIS’
other
public
filings
with
the
SEC
may
be
obtained
without
charge
at
the
SEC’s
website
at
www.sec.gov,
at
ARRIS’
website
at
www.arris.com
under
“Investors.”
Security holders and other interested parties will also be able to obtain, without charge, a copy of the
Form S-4/Proxy Statement and other relevant documents (when available) by directing a request to ARRIS at 3871
Lakefield Drive, Suwanee, Georgia 30024, Attention: Investor Relations, (720) 895-7787 or by e-mail to
bob.puccini@arris.com.
Security
holders
may
also
read
and
copy
any
reports,
statements
and
other
information
filed
with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C.  20549. Please call
the
SEC
at
(800)
732-0330
or
visit
the
SEC’s
website
for
further
information
on
its
public
reference
room.
22 April 2015
4
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


SAFE HARBOR
Participants in the Solicitation
ARRIS, its directors and certain of its executive officers may be considered participants in the solicitation of proxies in
connection with the transactions contemplated by the Proxy Statement. Information about the directors and
executive
officers
of
ARRIS
is
set
forth
in
its
Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2014,
which
was
filed
with
the
SEC
on
February
27,
2015
and
its
proxy
statement
for
its
2015
annual
meeting
of
stockholders, which was filed with the SEC on April 9, 2015. Other information regarding potential participants in the
proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be
contained in the Proxy Statement/Prospectus when it is filed.
Responsibility
The directors of ARRIS accept responsibility for the information
contained in this document and, to the best of their
knowledge and belief (having taken all reasonable care to ensure
that such is the case), the information contained in
this document is in accordance with the facts and it does not omit anything likely to affect the import of such
information.
Pace
acquisition-specific
documents
can
be
found
at
22 April 2015
5
Copyright 2015 –
ARRIS Enterprises, Inc. All rights reserved.
www.arris.com/pace


Combination enhances shareholder value
Significantly enhances ARRIS international presence
Provides large scale entry into satellite segment
Broader product portfolio in equipment, software and services
World-class technology and people
~ $8B pro forma revenues
~ 8,500 combined employees, globally based
Accretive  transaction that maintains capital structure flexibility
22 April 2015
6
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


1
2
3
4
ARRIS ANNOUNCES
AGREEMENT TO ACQUIRE PACE PLC
Transaction equity value : ~$2.1B
(~£1.4B)
Stock and cash transaction
Diversifies customer base, product portfolio
and global presence
Enhances scope and scale, ability to invest in
innovative technologies and customer
responsiveness
Strong fit with ARRIS strategy
Expect Non-GAAP EPS accretion of $0.45 -
$0.55 in first 12 months after closing
Maintains capital structure flexibility
Pro forma Non-GAAP tax rate of 26% to 28%
The acquisition materially enhances
shareholder value
Customary regulatory approvals
ARRIS and Pace shareholder approval
Transaction is expected
to close 2H 2015
22 April 2015
7
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


ARRIS and Pace to each merge into
subsidiaries of a new holding
company
(“New ARRIS”)
New ARRIS to be incorporated in the
UK
Operational
headquarters
will
remain in Suwanee, GA
No
Change
in
ARRIS
Board
of
Directors,
CEO or CFO
New ARRIS shares expected to be
listed on NASDAQ
NEW ARRIS
POST-CLOSING STRUCTURE
22 April 2015
8
~76%
~24%
COMBINED ASSETS OF:
POST-CLOSING STRUCTURE
NEW ARRIS
(UK INCORPORATED)
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.
SHAREHOLDERS
SHAREHOLDERS


TRANSACTION OVERVIEW
Acquisition of Pace in cash and New ARRIS
stock representing a Transaction Equity Value
of $2.1B
ARRIS shareholders to receive one share of
New ARRIS for each ARRIS share in a taxable
transaction
Pace shareholders to receive per-share
consideration valued at 426.5p as of 4/21/15,
consisting of 132.5p in cash and  0.1455
shares of New ARRIS
ARRIS has secured committed funding for the
transaction
New ARRIS ownership: 76% ARRIS
shareholders / 24% Pace shareholders
TRANSACTION TERMS
28% premium to last closing share price
24% premium to 3-month average share price
IMPLIED PREMIUM
ARRIS and Pace each to merge into
subsidiaries of a UK holding company (New
ARRIS)
New ARRIS incorporated in the UK; New
ARRIS expected to retain NASDAQ listing
New ARRIS to maintain operational
headquarters in Suwanee, GA
TRANSACTION STRUCTURE
Transaction Enhances Shareholder Value
22 April 2015
9
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


ARRIS OVERVIEW (NASDAQ: ARRS)
Global innovator in IP, video and broadband technology
continually working with our customers to transform
entertainment and communications to solve the most
pressing challenges of 21st century communications
FY2014 Revenue
$5.3 Billion
Over 1,000 Customers
served, globally
2,000+ patents
approved or pending
6,500 Employees. HQ in
Suwanee, GA USA
Direct and indirect
presence in 84 countries
$5.3B
1K
84
2K+
6K+
22 April 2015
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Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


ARRIS PORTFOLIO
NETWORK & CLOUD
CUSTOMER PREMISES EQUIPMENT
IP or HFC
Delivery
Network
22 April 2015
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Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.
CMTS / CCAP
VIDEO INFRASTRUCTURE
ACCESS & TRANSPORT
CLOUD SERVICES
GLOBAL SERVICES
VIDEO GATEWAYS
SET-TOP BOXES
MODEMS
CONNECTED TV CLIENTS
MULTISCREEN


PACE OVERVIEW (LSE: PIC)
A world leader in technologies, products and services
for
the
Pay
TV
and
broadband
industries,
Pace
has
an
end-to-end range of products and services to simply and
cost-effectively evolve digital services for subscribers
22 April 2015
12
$2.6B
200+
~38%
2K
500+
FY2014 Revenue
$2.6 Billion
Over 200 Customers
served, in 50 countries
Non North America
revenue
500+ patents approved or
pending
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.
~2,000 Global Employees.
HQ in Saltaire, UK


PACE PORTFOLIO
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13
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


BROADENS GLOBAL CUSTOMER BASE
22 April 2015
14
ENHANCED INTERNATIONAL PRESENCE
SATELLITE
CABLE
TELCO
SIGNIFICANT ADDRESSABLE MARKET
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


FINANCIAL HIGHLIGHTS
David Potts, EVP, CFO


FINANCIALLY COMPELLING
TRANSACTION
1
~$8 Billion
Pro forma revenues
2
$0.45 -
$0.55
Accretive to Non–GAAP EPS, first 12
months after completion
4
~26% to 28%
Pro forma Non-GAAP effective
tax rate
5
Target cash ~$650M
Pro forma leverage ratio of <2.5x
Debt/LTM EBITDA
Strong capital structure,
post transaction
22 April 2015
16
3
Product costs, operating expenses,
public company costs
Proven track record of integrations
Significant synergy opportunities
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


TRANSACTION FINANCING
22 April 2015
17
(1)
Estimated as of 4/21/2015
(2)
Assumes repayment of outstanding Pace debt with cash on hand at close
Maintains significant capital structure flexibility
New Credit facility underwritten by Bank of America Merrill Lynch
Incremental commitment of ~$800M from Bank of America
Merrill Lynch
Sources
Uses
Cash
$55
Cash Consideration (132.5p per Pace Share)
$655
New ARRIS Debt
700
Value
of
New
ARRIS
Shares
Issued
to
Pace
(1)
1,455
Value
of
New
ARRIS
Shares
Issued
to
Pace
(1)
1,455
Transaction Equity Value
$2,110
Fees + Expenses
100
Total Sources
$2,210
Total Uses
$2,210
Estimated Pro Forma Leverage
Estimated Liquidity at Close
Estimated Debt / LTM EBITDA
Less than 2.5X
Estimated Cash at Close
$650
Plus: Revolver Capacity at Close
500
Available Liquidity
$1,150
(2)
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.


Combination enhances shareholder value
Significantly enhances ARRIS international presence
Provides large scale entry into satellite segment
Broader product portfolio in equipment, software and services
World-class technology and people
~ $8B pro forma revenues
~ 8,500 combined employees, globally based
Accretive  transaction that maintains capital structure flexibility
22 April 2015
18
Copyright 2015 – ARRIS Enterprises, Inc. All rights reserved.