Analyst Sees Synergies In Arris (ARRS) / Google (GOOG) Deal

Arris Group's (NASDAQ: ARRS) planned acquisition of Google's (NASDAQ: GOOG) Motorola Home business is indeed a transformative acquisition for the company, in the view of Needham and Company. Analyst Richard Valera thinks the deal will roughly triple Arris's annual revenue and double its annual EPS, while adding about $2 billion of debt to its balance sheet.

"While we're concerned about the growth prospects of Motorola's set top box (STB) business and see risk in the company being able to ramp next-gen home gateway sales quickly enough to offset the likely ongoing decline in STB sales, we believe that given the high degree of overlap in the businesses and Motorola’s relatively poor op margins, that there is likely more upside than downside to the company's synergy assumptions," said Valera.

Needham & Company reiterated a Buy rating on ARRIS Group (NASDAQ: ARRS) and raised its price target to $18.00 (from $15.00).

For an analyst ratings summary and ratings history on ARRIS Group click here. For more ratings news on ARRIS Group click here.

Shares of ARRIS Group closed at $15.06 yesterday.

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