Arris Acquisition of Pace to put it Right on the Heels of Cisco

RENO, NV, April 23, 2015

Arris announced yesterday that it is to acquire Pace in a deal that is expected to close late in 2015, providing it receives shareholder and regulatory approvals. Synergy Research Group data shows that in 2014 Arris and Pace in aggregate achieved a 17% share of the worldwide video infrastructure market, compared with market leader Cisco’s 18% share. The combined Arris/Pace would totally dominate the client hardware segments, while still lagging Cisco in network hardware and video infrastructure software Client hardware, or CPE, accounted for 43% of the total video infrastructure market in 2014, and Arris and Pace were already the number one and two ranked vendors in this space. Together they will now be over three times the size of their nearest client hardware rival, Technicolor, in an area where Cisco continues to lose market share. While Pace is one of the two leading client hardware vendors, its position in the network hardware and infrastructure software segments is relatively minor, so the acquisition will not be a great assist to Arris in closing the gap on Cisco in those areas.

“It is just two years ago that Arris completed the acquisition of Motorola Home, and it is now making a huge statement by announcing the proposed acquisition of Pace,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “Cisco has some real strength and depth on the network and software sides of the market, but client hardware has proven to be an Achilles heel for it and Arris is clearly determined to totally own that part of the video market. Coming so soon after the Motorola deal it is also a bold statement of faith in the ability of Arris to integrate large and complex acquired companies.”