Terayon Communication Systems (fka TERN)

[SEBASS]

ARRIS eyeing competitors as acquisition targets

http://www.cedmagazine.com/article/CA6388757.html

ARRIS looks to fuel acquisition war chest
By Jeff Baumgartner, CED

November 6, 2006

ARRIS said it plans to raise $225 million in a proposed offering, with the proceeds to go toward general corporate purposes, "including the funding of future acquisitions."

Although ARRIS is already well positioned with VoIP gear as well as modems and headend equipment that support the advanced DOCSIS 3.0 specs, it's most obvious long term need is the addition of digital video technology and equipment to its menu.

The most often-rumored acquisition target for ARRIS is nearby Concurrent Computer Corp., a key maker of video-on-demand servers and backend software.

In addition to Concurrent, ARRIS "may also continue to be eyeing other acquisition opportunities in the space," according to recent research from ThinkEquity Partners that points to other possible, publicly-traded examples such as Terayon Communication Systems, C-COR Inc. and Harmonic Inc.

ThinkEquity also suggested that ARRIS "may be holding out for a more-favorable stock price," when it comes to the possibility of making a play for Concurrent. "We believe ARRIS is a very cheap company with a bargain attitude. We like that."

As for ARRIS' planned offering, the $225 million of convertible senior notes would be due 2026. ARRIS said it will also grant underwriters a 30-day option, solely to cover over-allotments, to purchase up to an additional $33.75 million of the notes.