Technology: Pace's bid for Motorola's television division fails
(Guardian (UK) Via Acquire Media NewsEdge) Google has disappointed the British set-top box maker Pace by selling its profitable Motorola Home business to US telecoms group Arris in a $2.35bn (1.4bn) cash-and-shares deal.
Pace was a frontrunner, with Arris, to buy the division, which Google is selling after acquiring the larger Motorola Mobility (MMI) mobile handset and set-top box business for $12.5bn in August.
The move leaves Google with the loss-making handset business and the patent portfolio belonging to MMI, with which it is hoping to fend off lawsuits against its Android mobile-phone software from Apple, Microsoft, Nokia and others.
Pace indicated that Google had demanded too high a price for Motorola Home. Arris will acquire the business for $2.05bn in cash - which it is raising through debt financing - plus about $300m in newly issued shares in Arris, amounting to roughly 15.7% of the company. The deal should be closed by the second quarter of 2013.
For Arris, the acquisition gives it broader capabilities in consumer video products and services, and will boost its patent portfolio through a licence to what it called "a wide array" of MMI patents.
MMI's Home business generated quarterly revenues of about $880m over the past year, and about $60m of quarterly profit. It builds set-top boxes for many US cable companies.
In a statement, Mike Pulli, Pace's chief executive, said: "We viewed the potential acquisition of Google's Motorola Home business as an opportunity to accelerate our stated strategy, but only if real shareholder value could be delivered." He said that Pace expected to remain on target for its 2012 results. Charles Arthur
(c) 2012 Guardian Newspapers Limited.
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