Troutman Sanders Takes the Lead on Atlanta’s Most Complex 2015 Transaction
Troutman Sanders represented its long-standing client ARRIS Group, Inc., in a $2.1 billion acquisition of Pace plc and a simultaneous “inversion,” in which ARRIS reincorporated in the United Kingdom. The transaction involved the formation of a new U.K. holding company, ARRIS International plc, the acquisition of U.K.-based Pace under a court -sanctioned “scheme of arrangement” pursuant to the U.K. Takeover Code, and the merger of the former ARRIS Group into a subsidiary of the new company. In connection with the acquisition, ARRIS entered into a $2.9 billion secured multicurrency credit facility, for which Bank of America was the lead arranger.
The transaction required stockholder approval by both groups of stockholders, the filing and effectiveness of a Form S-4 with the U.S. Securities and Exchange Commission, and the negotiation of a Special Eligibility Agreement for Securities with The Depositary Trust Company, as well as competition authority approval in several countries. ARRIS’ operational headquarters will remain in Suwanee, Georgia.
“Because of the multi-jurisdictional nature of the transaction – ARRIS and Pace both do business around the world – and its size, the transaction was a significant acquisition to start with. Layering on the reincorporation of ARRIS in the U.K. and the related tax issues made it particularly complex with a lot of moving parts,” said Brinkley Dickerson, corporate partner, Troutman Sanders LLP. “Team work was critical, and I believe that we were able to get the transaction completed in an efficient and beneficial manner for the client.”
“For companies making a significant international acquisition in an appropriate jurisdiction, inversions continue to provide substantial economic benefits for stockholders,” said Robert Friedman, tax partner, Troutman Sanders LLP. “The tax issues can be complicated, but they all are solvable, and the benefits easily can justify the necessary effort. In the end, ARRIS expects that this structure will reduce its effective tax rate on both a GAAP and a non-GAAP basis.”
The Troutman Sanders team was lead by Brinkley Dickerson, Tyler Dempsey and Heather Ducat in the Corporate practice, Hazen Dempster in the Finance practice, Jeff Banish in the Benefits practice, Robert Friedman in the Tax practice, and Tim Mast in the Litigation practice. Herbert Smith Freehills was U.K. counsel, Hogan Lovells was special competition counsel and Deloitte advised with respect to the tax modeling and structuring.
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