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Arris To Acquire Digeo

Suwanee, Ga. — The assets of Paul Allen’s advanced cable set-top-box company Digeo will be acquired by Arris Group in a $20 million cash deal announced by the companies Tuesday.

Through the agreement, which is expected to close early in the fourth quarter of 2009, Arris Group will get Digeo’s engineering team and intellectual property portfolio.

Arris will add the Digeo assets to those it recently garnered through the acquisition of EG Technology (EGT) in a separate transaction, Arris said.

The Digeo deal brings “substantial technical expertise in video networking and an innovative multimedia services delivery platform,” the companies said.

“The engineering talent and intellectual property acquired as part of these transactions will be combined with Arris’ internal development efforts to accelerate the introduction of next-generation IP-based consumer video products and services,” according to a statement on the deal. “These new products will allow the company’s customers to cost effectively integrate and distribute new forms of personalized multimedia content throughout the home.”

Arris said it will continue to develop and market the current line of Digeo DVR products, including Digeo’s Moxi Cable DVR and consumer HD DVR that uses the Moxi interface. Customers who have purchased or rented through cable operators Digeo equipment “will continue to enjoy uninterrupted service and updates,” the company said.

“Several years ago we laid out a strategy to establish Arris as a leader in video networking,” stated Bob Stanzione, Arris chairman and CEO. “Our strategy includes both organic development and strategic acquisitions. The Digeo acquisition, along with our acquisition of EGT last month, has enhanced our ability to aggressively pursue end to end video delivery initiatives.”

Through the Digeo transaction, Arris will add approximately 75 employees located in Kirkland, Wash.

The addition of the Digeo engineering team will raise the company’s research and development investment by approximately $3M per quarter, the company said.

“As the global leader in broadband technology for the cable industry, Arris delivers the market position necessary to take the Moxi vision to the next level,” stated Greg Gudorf, Digeo CEO. “Arris recognizes the value of adding Digeo’s highly-innovative technology to its portfolio, allowing the company to integrate the Moxi line of products and services as core to its expansion into the digital home. Further, Arris recognizes the value Digeo’s highly talented people bring to the equation. I am extremely pleased that the Digeo team will continue to drive the evolution of the Moxi platform.”