CommScope likes the look of Arris – report

Reuters reckons US networking vendor CommScope is seriously courting UK cable and set top box company Arris.

The report, which cites those shadowy ‘people familiar with the matter’ that are so often responsible for such leaks, just claims the two companies are in talks for CommScope to acquire Arris. The exponentially-growing public demand for streaming video is apparently one of the big drivers behind the talks.

The market values of the two companies aren’t too far apart, but a big reason for this was CommScope’s share price going down the toilet when it announced its Q1 2018 numbers. Specifically forward guidance that indicating a degree of commoditisation in its core markets seemed to spook investors and it could well be that a good old bit of M&A might be just what they need to cheer them up.

Arris is no stranger to M&A of late, having grabbed Ruckus from Broadcom at the end of last year. There seems to be a bit of an accelerated trend towards consolidation among tier 2 kit vendors, apparently catalysed by fear of commoditisation. Light Reading has further analysis of the pros and cons of the potential move here.

Ruckus switches from Broadcom to Arris

A relatively minor act in the current TMT M&A frenzy sees fixed-line player Arris add Ruckus Wireless in a bid to diversify both its offering and routes to market.

Arris bid for Ruckus back in February when Broadcom revealed that it was a superfluous part of its Brocade acquisition. So the deal has taken around 9 months to push through, which is relatively quick by today’s standards.

The rationale is a familiar one in these convergent times. Telcos and other enterprise customers are increasingly diversifying their connectivity options to anyone looking to flog them stuff needs to do so too. Arris is now able to sex-up its cable offerings with some wifi and LAN switching action. What’s not to like?

To accommodate the strategic shift this acquisition entails Arris is creating a new enterprise networks business segment that will be led by the former COO of Ruckus Dan Rabinovitsj.

“This combination underscores our shared vision of achieving market leadership across wireless and wired networks in close partnership with our valued customers and channel partners,” he said.

“We’re very excited about the collaboration opportunities across our product portfolios to enable connectivity from the office to the home and to all the places in between. Joining Arris means we still do what Ruckus does best, but on a larger, global scale. I’m excited to lead the Ruckus Networks team into our next stage of growth and innovation.”

“I’m proud to welcome the 1,700 talented Ruckus Wireless and ICX Switch Business employees into the Arris family,” said Bruce McClelland, Arris CEO. “It’s an important milestone, not only for Arris but for our industries. Ruckus’ unmatched expertise in wireless and wired networking perfectly complements our growth strategy of driving towards a constantly connected, mobile future.

“The acquisition brings diversification to our portfolio, building on our strength in networking and helping us to serve new verticals. Ultimately, our combined portfolios and scale will help our customers and partners deliver a smart, simple connected world for billions of people.”

You can hear more from the dynamic duo, as well as some atmospheric music that seems to have been taken from a 1980s action movie, below and read some analysis of how the deal is likely to play out by Light Reading here.