Pinsents and HSF’s US links pay off in $7.5bn telecoms deal

Herbert Smith Freehills (HSF) and Pinsent Masons have teamed up with firms in the US on a complex $7.5bn deal between telecoms companies CommScope and Arris.

The transaction will see network equipment provider CommScope buy software maker Arris, a fellow US-headquartered that is listed on the NASDAQ.

Pinsents London partners Rob Hutchings and Roberta Markovina advised CommScope on UK M&A matters, while partner Eloise Walker supported on tax.

The firm worked alongside Alston & Bird partners Mark Kelly and William Snyder, who led on US elements of the transaction. Latham & Watkins and Skadden Arps Slate Meagher & Flom also played key roles for CommScope and are understood to have advised on financing issues.

The target Arris was represented by a trio of partners from HSF’s corporate group in London; Gavin Davies, Alex Kay and Caroline Rae. The firm also led on tax advice for the company, with global head Isaac Zailer on call.

HSF was brought in by Troutman Sanders to work on UK aspects of the transaction, while the US firm led on matters overseas with Atlanta-based Brink Dickerson.

Hogan Lovells is understood to have advised on antitrust issues for Arris.

In connection with the acquisition, the Carlyle Group has also re-established an ownership position in CommScope through a $1bn minority equity investment. Cravath Swaine & Moore M&A partners Keith Hallam and Jenny Hochenberg advised CommScope on this specific part of the deal, while Simpson Thacher & Bartlett won the role for Carlyle.

CommScope’s CEO Eddie Edwards said: “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. 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.”

Background to the deal

Few cross-border M&A deals have such an array of advisers listed, but this was a particularly complex transaction made up of several different corporate and finance components. First of all, Arris is a US company listed on the Nasdaq but is nevertheless structured as a UK plc. There was then a significant financing element involved in the deal, with CommScope agreeing too to the repayment of Arris’ debt. Finally CommScope needed to raise equity of around $1bn, which saw Carlyle wade in to reclaim ownership in the company.

Arris took over UK company Pace in a $2bn deal in 2015, in which Travers Smith advised Pace, and HSF and Troutman worked with Arris. This was the first role HSF picked up for Arris.

Pinsents worked with CommScope for the first time in 2014, grabbing the mandate on its acquisition of two of Alifabs’ businesses. Alston is a longstanding adviser to CommScope in the US; Silicon Valley-based Snyder has acted on its $3bn acquisition of TE Connectivity’s telecom, enterprise and wireless businesses in 2015.

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