Term sheet | Term Sheet to | |
To prospectus dated November 6, 2006, | Prospectus Supplement | |
prospectus supplement dated November 6, 2006 | Registration Statement No. 333-138445 | |
Dated November 6, 2006 | ||
Filed Pursuant to Rule 433 |
Final terms and conditions | November 6, 2006 |
Issuer: | ARRIS Group, Inc. (NASDAQ GS: ARRS) |
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The Notes: | 2.00% Convertible Senior Notes due 2026 |
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Offering Size: | $240 million |
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Over-allotment Option: | $36.00 million (15%) |
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Maturity: | November 15, 2026 |
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Joint Book-running Managers: | UBS Investment Bank (Stabilization agent) & Deutsche Bank Securities Inc. |
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Issue Price: | 100% principal amount |
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Coupon: | 2.00% per annum from November 13, 2006, payable semi-annually in arrears on May 15 and November
15 each year, beginning on May 15, 2007 |
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Conversion Premium: | Approximately 40.00% |
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Initial Conversion Rate: | 62.1504 |
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Initial Conversion Price: | Approximately $16.09, priced off the closing price of $11.49 on November 6, 2006 |
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Redemption: | Redeemable at the Issuers option on or after November 15, 2013 at 100% of the principal
amount of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date. |
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Investor Put Option: | On each of November 15, 2013, November 15, 2016 and November 15, 2021, at a purchase price in
cash equal to 100% of the principal amount of the Notes, plus any accrued and unpaid interest
to, but excluding, the purchase date. |
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Conversion Rights: | The Notes may be surrendered for conversion if |
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(i) prior to November 15, 2025, during any calendar quarter after the calendar quarter ending
December 31, 2006 (and only during such calendar quarter), if the closing sale price of Issuers
common stock, for each of 20 or more trading days in a period of 30 consecutive trading days
ending on the last trading day of the immediately preceding calendar quarter, exceeds 120% of
the conversion price in effect on the last trading day of the immediately preceding calendar
quarter; |
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(ii) prior to November 15, 2025, during the five consecutive business days immediately
after any five consecutive trading day period in which the average trading price per $1,000
principal amount of Notes was equal to or less than 98% of the average conversion value of the
Notes during such five consecutive trading day period; |
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(iii) prior to November 15, 2025, upon
occurrence of certain distributions or corporate transactions specified in the prospectus for
the Notes; |
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(iv) prior to November 15, 2025, if the Issuer has called the Notes for redemption;
and |
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(v) from, and including, October 15, 2013 to, and including, November 15, 2013, and at
any time from, and including,
November 15, 2025, to, and including, the close of business on the business day immediately
preceding November 15, 2026. |
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Payment Upon Conversion: | Upon conversion, holders will receive, per $1,000 principal amount being converted, a settlement
amount that is equal to
the sum of the daily settlement amounts for each of the 20 trading days during the cash settlement
averaging period.
The daily settlement amount on a trading day consists of (i) cash equal to the lesser of (a) $50
and (b) the daily
conversion value on that trading day; and (ii) to the extent such daily conversion value exceeds
$50, (a) a number of
shares equal to the excess of such daily conversion value over $50, divided by (b) the volume
weighted average price of
Issuer common stock on that trading day. The cash settlement averaging period with respect to any
Note means (1) for
Notes that are converted at any time on or after the 23rd scheduled trading day prior
to the maturity date of the Notes,
the 20 consecutive trading days beginning on, and including, the 20th scheduled trading
day prior to the maturity date;
and (2) in all other instances, the 20 consecutive trading days beginning on, and including, the
third trading day after the
Notes are tendered for conversion. The daily conversion value on a given trading day means
one-twentieth of the
product of (i) the applicable conversion rate; and (ii) the volume weighted average price of Issuer
common stock on that
trading day. |
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Dividend Protection: | Full dividend protectionConversion rate adjustment upon any cash distributions, tender offers
or exchange offers to holders of ARRIS common stock. |
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Put Upon a Fundamental Change: |
If a fundamental change occurs, each holder will have the right, at its option, to require
Issuer to repurchase for cash all or any portion of the holders Notes at a price equal to 100%
of the principal amount of the Notes, plus any accrued and unpaid interest to, but excluding,
the fundamental change repurchase date. |
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Use of Proceeds: | The estimated net proceeds to Issuer from this offering will be $233.0 million (or $268.1
million if the underwriters exercise their over-allotment option in full), after deducting the
underwriters discounts and commissions and estimated offering expenses payable by Issuer.
Issuer intends to use the net proceeds of this offering for general corporate purposes,
including funding future acquisitions. |
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Ranking: | Senior unsecured |
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Listing: | The Notes will not be listed on any securities exchange or quoted in any automated quotation
system. |
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Form: | Registered |
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Denomination: | $1,000 and integral multiples thereof |
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Settlement: | DTC |
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Governing Law: | New York |
Conversion Rate Adjustment Upon a Make- Whole Fundamental Change: |
If a make-whole fundamental change occurs before November 15, 2013, the conversion rate applicable to Notes that
are surrendered for conversion at any time from, and including, the 30th business day before the date Issuer originally
announces as the anticipated effective date of the make-whole fundamental change to, and including, the 30th business
day after the actual effective date of the make-whole fundamental change (or, if the make-whole fundamental change
also constitutes a fundamental change, to, and including, the fundamental change repurchase date for that fundamental
change) (the make-whole conversion period) will be increased by an amount set forth below. |
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Make-Whole Table |
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The following table sets forth the number of additional shares per $1,000 principal amount of Notes that will be added to
the conversion rate applicable to Notes that are converted during the make-whole conversion period. The applicable
prices set forth in the first column of the table below, and the number of additional shares, are subject to adjustment as
described in the prospectus for the Notes. |
Effective date | ||||||||||||||||||||||||||||||||
Applicable | November 7, | November 15, | November 15, | November 15, | November 15, | November 15, | November 15, | November 15, | ||||||||||||||||||||||||
price | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | ||||||||||||||||||||||||
$11.49 |
24.88 | 24.88 | 24.88 | 24.88 | 24.88 | 24.88 | 24.88 | 24.88 | ||||||||||||||||||||||||
$12.50 |
21.88 | 22.80 | 22.66 | 22.35 | 21.85 | 21.02 | 19.63 | 17.85 | ||||||||||||||||||||||||
$15.00 |
16.09 | 16.61 | 16.21 | 15.60 | 14.71 | 13.35 | 11.04 | 4.52 | ||||||||||||||||||||||||
$17.50 |
12.31 | 12.60 | 12.09 | 11.36 | 10.34 | 8.83 | 6.35 | | ||||||||||||||||||||||||
$20.00 |
9.70 | 9.86 | 9.32 | 8.56 | 7.54 | 6.07 | 3.78 | | ||||||||||||||||||||||||
$22.50 |
7.83 | 7.91 | 7.37 | 6.64 | 5.66 | 4.32 | 2.36 | | ||||||||||||||||||||||||
$25.00 |
6.43 | 6.47 | 5.95 | 5.27 | 4.37 | 3.18 | 1.56 | | ||||||||||||||||||||||||
$27.50 |
5.37 | 5.39 | 4.89 | 4.26 | 3.46 | 2.41 | 1.10 | | ||||||||||||||||||||||||
$30.00 |
4.54 | 4.54 | 4.09 | 3.51 | 2.79 | 1.89 | 0.83 | | ||||||||||||||||||||||||
$32.50 |
3.88 | 3.88 | 3.46 | 2.93 | 2.29 | 1.52 | 0.66 | | ||||||||||||||||||||||||
$35.00 |
3.35 | 3.34 | 2.96 | 2.48 | 1.91 | 1.25 | 0.55 | | ||||||||||||||||||||||||
$37.50 |
2.91 | 2.91 | 2.55 | 2.13 | 1.62 | 1.05 | 0.48 | | ||||||||||||||||||||||||
$40.00 |
2.54 | 2.54 | 2.22 | 1.84 | 1.39 | 0.90 | 0.43 | | ||||||||||||||||||||||||
$42.50 |
2.24 | 2.24 | 1.95 | 1.60 | 1.21 | 0.78 | 0.39 | | ||||||||||||||||||||||||
$45.00 |
1.98 | 1.99 | 1.72 | 1.41 | 1.05 | 0.68 | 0.35 | | ||||||||||||||||||||||||
$47.50 |
1.76 | 1.77 | 1.53 | 1.24 | 0.93 | 0.61 | 0.33 | | ||||||||||||||||||||||||
$50.00 |
1.57 | 1.59 | 1.36 | 1.11 | 0.83 | 0.55 | 0.30 | |
If the applicable price is between two applicable prices in the table or the effective date is between two effective dates in
the table, the number of additional shares will be determined by a straight-line interpolation between the number of
additional shares set forth for the higher and lower applicable prices and the two effective dates, as applicable, based on
a 365-day year. In addition, if the applicable price is in excess of $50.00 per share (subject to adjustment), the
conversion rate will not be increased in connection with that make-whole fundamental change. If the applicable price is
less than $11.49 per share (subject to adjustment), the conversion rate will not be increased in connection with that
make-whole fundamental change. |
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Pricing Date: | November 6, 2006, after market close |
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Trade Date: | November 7, 2006 |
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Settlement Date: | November 13, 2006 |
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Security Codes: | CUSIP: 04269Q AC 4 ISIN: US 04269 QAC 42 |