23rd Apr 2015 06:32
LONDON (Alliance News) - Set-top TV box maker Pace PLC Thursday said it had made a good start to its new financial year, in line with its expectations, following its agreement late Wednesday to be acquired by US broadband media technology company Arris Group Inc for GBP1.4 billion in cash and shares.
Under the terms of the deal, shareholders of the FTSE 250-listed company will receive GBP1.325 in cash and 0.1455 of a Arris share for each Pace share, making a total consideration of GBP4.265 per share, a 28% premium to Pace's closing price on Tuesday. Shares in Pace closed at 322 pence on Wednesday.
The deal will result in the creation of New Arris, which will incorporated in the UK but which will retain its headquarters in Suwanee in the US state of Georgi. Pace shareholders will get approximately 48.2 million shares in the New Arris business and will hold a 24% stake in the new business, with Arris holding the remaining 76%.
Bob Stanzione, the chairman and chief executive of Arris Group, will become the chairman and chief executive of the combined entity.
Pace said Thursday that whilst it believed it is strongly positioned to continue to execute its strategy in the medium and long term, it also believes the proposed transaction "substantially recognises that potential as well as giving our shareholders the opportunity to share in the future success of the combined group."
Pace said its revenue in the year to date was higher than the previous year and demand from all of its markets and product segments is building. It continues to expects revenue to be stronger in its second half, similar to 2014.
Gross margins in the year to date were ahead of the first quarter of 2014 due to an improved revenue mix and on-going procurement benefits, and as a result, it achieved increased profitability compared to the previous year.
Pace will announce its full first-half results on July 28.
By Sam Unsted; [email protected]; @SamUAtAlliance, and Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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