(Reuters) - Broadband technology and software provider ARRIS Group Inc said it is to buy BigBand Networks, a video networking service provider, for $2.24 per share in cash -- a premium of 76 percent -- to strengthen its networked video technology capabilities.
ARRIS said the deal -- which equates to a diluted equity value of about $172 million, or $53 million net of estimated BigBand cash on hand -- extends the company's capabilities in processing, managing and distributing digital video content, and should help it to acquire technologies and patents.
"BigBand's valuable patent portfolio, coupled with their expertise in digital video networking, will enhance ARRIS' technological leadership as service providers move to an all-IP (Internet Protocol) Converged Network Architecture," ARRIS said in a statement.
ARRIS said it expects the deal, seen completing late this year, to be neutral or to add to profit by mid-2012.
Shares of Redwood City, California-based BigBand Networks soared 74 percent to $2.21 in pre-market trade on Tuesday. They closed at $1.27 on Monday on Nasdaq. Shares of Suwanee, Georgia-based ARRIS closed at $11.52, a 10-week high, on Monday on Nasdaq.
(Reporting by Soham Chatterjee in Bangalore, Editing by Ian Geoghegan)