Charter and Arris set up warrant agreement tied to network and cloud sales


Charter Communications and Arris have signed a warrant agreement, with the MSO potentially buying as many as 6 million shares of the vendor over the next two years based on how much network and cloud equipment and service it buys. 

Outlined in an 8-K filing with the SEC, the deal follows a very similar arrangement between Comcast and Arris involving 8 million shares that was announced in early July. 

The agreement is set to vest in three segments through 2018. 

“In order for the warrant to vest above the 1 million share threshold in 2016 and above the 2.5 million threshold in both 2017 and 2018, specified increased purchases are required and a set percentage of the purchases must be for goods and services included in ARRIS’ Network & Cloud segment for 2016, 2017, and 2018, respectively,” the 8-K filing said. 

The warrants expire on Sept. 30, 2023.

For its part, Comcast has recently been aggressive in forging deals that allow it to own a portion of its vendors based on how much business it gives them. Last week, the top MSO put out its own 8-K, outlining a deal with Harmonic tied to CCAP sales. 

And in March, Comcast entered into a warrant deal with remote control maker Universal Electronics, tied in part to the X1 voice remote. 

For more:
- read this SEC filing
- read this Multichannel News story

Related articles:
Comcast and Harmonic strike warrant agreement focused on virtual CCAP sales
Comcast signs warrants agreement with X1 voice remote maker Universal Electronics
Arris offers equity to Comcast to boost cloud business