Google Sells Motorola Broadband Unit To Arris For $2.35 Billion
Google has sold off Motorola Home, which is the broadband unit of Motorola Mobility. Motorola Home was sold to Arris, a broadband media technology company that specializes in the design and engineering of broadband networks. Arris is paying $2.05 billion in cash and around $300 million in newly issued Arris shares. Google will own around 15.7% of Arris after the transaction closes.
“We share a similar vision and strategy with Arris for the industry’s migration to IP. The combination of our solutions, expert technologists and roadmaps promises to transform how service providers deliver the smart, simple connected home to consumers throughout the world,” stated Marwan Fawaz, an EVP of Motorola Mobility that leads Motorola Home. Google acquired Motorola Mobility for $12.4 billion.
When Google acquired Motorola Mobility, they were highly interested in the company’s mobile business and patents. Motorola Home did not really have a use for Google since they primarily stick to software.
Arris CEO Bob Stanzione spoke on a call with analysts and one of the topics was around TiVo’s lawsuit against Motorola Mobility and Google. Back in October, TiVo claimed Motorola was responsible for “massive production of infringing DVRs” that “dwarfs the numbers of accused products at issue in TiVo’s previous cases.” The filing also claimed that TiVo’s damages is likely to run into the “billions of dollars.” Motorola filed patent infringement claims against TiVo too.
In most cases, a pending lawsuit would likely prevent an acquisition from taking place. Stanzione said in the call that Google agreed to cap Arris’ liability in the case to a “very small number.” When an analyst asked if Arris would be liable for $1 billion in damages, Stanzione laughed and suggested that it would be much lower than that.
“It’s not something you have to worry about in terms of the financial impact on Arris,” said Stanzione. “Google has taken that risk off the table for Arris.”
Google is taking on the financial liability of the lawsuit and they will continue to be the lead also. Arris is “going to help them as best as we can or as we’re asked to.” Arris will acquire a “generous patent portfolio” and will license a broad range of Motorola Mobility patents.