Published on CommScope (https://www.commscope.com/NewsCenter/) on November 8, 2018

CommScope to Acquire ARRIS: Approximately $7.4 Billion

Transaction Accelerates CommScope Vision to Shape

Communications Networks of the Future

Release Date: November 8, 2018

Terms: Corporate

Dateline City: HICKORY, NC, and SUWANEE, GA

Transaction More Than Doubles Expected Product Addressable Market to Greater Than $60 Billion

Expected to Generate Approximately $1 Billion in Cash Flow from Operations

and Be More Than 30

Percent Accretive to Adjusted EPS in First Full Year after Closing

Expect More than $150 Million in Annual Cost Synergies Within Three Years

The Carlyle Group Reestablishes Ownership Position in CommScope with $1 Billion Minority

Investment

CommScope (NASDAQ: COMM), a global leader in infrastructure solutions for communications networks, has

agreed to acquire ARRIS International plc (NASDAQ: ARRS), a global leader in entertainment and

communications solutions, in an all-cash transaction for $31.75 per share, or a total purchase price of

approximately $7.4 billion, including the repayment of debt.

In addition, The Carlyle Group, a global alternative asset manager, has reestablished an ownership position in

CommScope through a $1 billion minority equity investment as part of CommScope’s financing of the

transaction.

The combination of CommScope and ARRIS, on a pro forma basis, would create a company with approximately

$11.3 billion in revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)

of approximately $1.8 billion, based on results for the two companies for the 12 months ended September 30,

2018.

The combined company is expected to drive profitable growth in new markets, shape the future of wired and

wireless communications, and position the new company to benefit from key industry trends, including network

convergence, fiber and mobility everywhere, 5G, Internet of Things and rapidly changing network and

technology architectures.

ARRIS, an innovator in broadband, video and wireless technology, combines hardware, software and services

to enable advanced video experiences and constant connectivity across a variety of environments – for service

providers, commercial verticals, small enterprises and the people they serve. ARRIS has strong leadership

positions in the three segments in which it operates:

• Customer Premises Equipment (CPE), featuring access devices such as broadband modems, gateways

and routers and video set-tops and gateways;

• Network & Cloud (N&C), combining broadband and video infrastructure with cloud-based software

solutions; and

• Enterprise Networks, incorporating the recently acquired Ruckus Wireless® and ICX Switch®

businesses, and focusing on wireless and wired connectivity, including Citizens Broadband Radio Service

solutions.

For the 12 months ended September 30, 2018, ARRIS generated revenues of approximately $6.7 billion,

consisting of $3.9 billion from CPE, $2.2 billion from N&C and $568 million from Enterprise Networks (reflecting

only a partial year of Ruckus since its acquisition in December 2017).

“After a comprehensive evaluation of our business and the evolving industry we operate in, we are confident

that combining with ARRIS is the best path forward for CommScope to grow and provide the greatest returns

for shareholders,” said Eddie Edwards, president and chief executive officer, CommScope. “CommScope and

ARRIS will bring together a unique set of complementary assets and capabilities that enable end-to-end wired

and wireless communications infrastructure solutions that neither company could otherwise achieve on its

own. With ARRIS, we will access new and growing markets, and have greater technology, solutions and

employee talent that will provide additional value and benefit to our customers and partners.

“CommScope and ARRIS share a customer-first culture that emphasizes innovation, made possible by

incredibly talented and experienced teams of people. As we have with numerous transactions in the past, we

expect to work together with Bruce McClelland and the ARRIS team to create a best-in-class management

team and achieve a seamless integration. Together, CommScope and ARRIS will be well positioned to serve a

more diverse set of customers and generate substantial value for our shareholders.”

ARRIS Chief Executive Officer Bruce McClelland said, “CommScope is an ideal partner for ARRIS. In addition to

providing immediate and substantial cash value to our shareholders, we are excited for what this combination

will deliver for our customers, partners and employees around the world. Today’s agreement is a testament to

the strength of ARRIS: our leading technology, talented employees and established competitive position. With

CommScope, we expect to further advance ARRIS’ strategy to drive innovation across our iconic brands and

pioneer the standards and pathways for tomorrow’s personalized, connected always-on consumer experience.

ARRIS will become part of an even stronger, more global industry leader, and I look forward to working with

the CommScope team to achieve great results for the combined company.”

Transaction is a critical step in fueling growth, shareholder value and customer benefits:

•

Positioned to Capitalize on Positive Industry Trends:

The combined company will be well positioned to

benefit from key industry trends by combining best-in-class capabilities in network access technology

and infrastructure and creating end-to-end and comprehensive solutions. We believe trends such as

network convergence, fiber and mobility everywhere, the advent of 5G and fixed wireless access,

Internet of Things and rapidly changing network and technology architectures will provide compelling

long-term opportunities for the combined company and its unique end-to-end communications

infrastructure capabilities.

•

Unlocks Significant, High-Growth Segments and Increases Product Addressable Market:

The

company expects to more than double its total product addressable market to more than $60 billion,

with a unique set of complementary assets and capabilities that enable end-to-end communications

infrastructure solutions such as:

◦

Converged small cell solutions for licensed and unlicensed wireless spectrum;

◦

Complementary wired and wireless communications infrastructure;

◦

Integrated broadband access;

◦

Private network solutions for industrial, enterprises and public venues; and

◦

Comprehensive connected and smart home solutions.

• Expanded Product Offerings and R&D Capabilities to Meet Diversified Customer Base: CommScope

and ARRIS will share strong technical expertise with approximately 15,000 patents and approximately

$800 million in average annual research and development investments. With a stronger global footprint,

the combined company is expected to serve customers across more than 150 countries.

• Strong Financial Profile with Cost Savings Opportunities: For the 12 months ended September 30,

2018, on a pro forma basis, the combined company would have generated revenues of approximately

$11.3 billion with adjusted EBITDA of approximately $1.8 billion. As a result of the combined company’s

increased scale, CommScope expects to achieve annual run-rate cost savings of at least $150 million

within three years post-close, with synergies of more than $60 million expected to be realized in the

first full year after closing and more than $125 million expected to be realized after the second year post

-close, driven from natural synergies primarily in direct procurement and SG&A.

• Significantly Accretive to CommScope’s Earnings: The transaction is expected to be more than 30

percent accretive to CommScope’s adjusted earnings per share by the end of the first full year after

closing, excluding purchase accounting charges, transition costs and other special items.

•

Maintains CommScope’s Strong Balance Sheet, Credit Position and Financial Flexibility:

With a

unique set of complementary assets and capabilities that enable end-to-end communications

infrastructure solutions, the combined company is expected to generate approximately $1 billion in cash

flow from operations

in the first full year after closing. Upon completion of the transaction,

CommScope’s net leverage (debt less cash) ratio based on pro forma adjusted EBITDA

for the 12

months ended September 30, 2018 is expected to be 5.1x, including full run-rate synergies of $150

million. Given the increased scale and cash flow generation, as well as both companies’ track records of

successful integration, CommScope expects to rapidly de-lever, targeting a net leverage ratio of

approximately 4.0x in the second full year after closing. Long term, the company is targeting a net

leverage ratio of 2.0x to 3.0x.

Terms and Financing

The per share cash consideration represents a premium of approximately 27 percent to the volume weighted

average closing price of ARRIS’ common stock for the 30 trading days ended October 23, 2018, the day prior to