Google has agreed to sell its Motorola Home business to Arris Group Inc. for $2.35 billion, finding a buyer for a division that sells television set-top boxes while it focuses on expanding in smartphones.

Arris, a cable-equipment maker, will pay about $2.05 billion in cash and about $300 million in newly issued shares that will give Google a stake of about 15.7 percent, the companies said yesterday in a statement.

Google (Nasdaq: GOOG), which acquired the division through the $12.5 billion purchase of Motorola Mobility Holdings Inc. in May, received multiple offers on Dec. 7, a person with knowledge of the matter said earlier this month. Google sought a buyer for the home unit as it aims to devote more attention to mobile devices amid an accelerating rivalry with Apple Inc.

“Google never really wanted the set-top box business,” Brian Wieser, an analyst at Pivotal Research Group in Portland, Oregon, said in an interview. “What they wanted were the mobile patents. It was very clear this wasn’t why they were buying the business in the first place.”

Google fell less than 1 percent to $720.11 at yesterday’s close in New York, while Arris slipped less than 1 percent to $14.54. The deal was announced after regular trading hours.

Pace Loses

Pace Plc, a U.K. maker of set-top boxes and a suitor of the assets, said in a statement that it was unable to reach an agreement with Google.

Barclays Plc is advising Google, while Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel. Evercore Partners Inc. is the lead financial adviser to Suwanee, Georgia- based Arris, and Troutman Sanders LLP is providing legal advice. Bank of America Corp. is also advising Arris, the companies said.

Adding Motorola Home helps Arris more than triple sales, on a pro-forma basis, to about $4.7 billion for the year that ended Sept. 30, according to the statement. The company will have about 2,000 patents after the acquisition, Arris said in a presentation.

The agreement also includes provisions to cap potential liability for intellectual-property infringement. Digital-video recording company TiVo Inc. is suing Motorola Mobility and Cisco Systems Inc. over use of recording technology in the set-top boxes they make.

“Google has taken that risk off the table,” Arris Chief Executive Officer Bob Stanzione said on a conference call.

With Motorola Home, Arris will be able to get products to market faster, expand its customer base and become more “relevant” in the set-top box business, he said.

Newer Set-Tops

The agreement gives Arris patents in areas such as video processing and digital-rights management, he said — plus the right to license additional intellectual property from Motorola Mobility, Stanzione said. Arris sees an opportunity to sell new equipment to customers whose home cable-TV sets don’t support Internet-video delivery, he said.

“There’s an aging installed base of set-tops out there,” he said.

The company now gets about half its revenue from two customers — Comcast Corp. and Time Warner Cable Inc., Stanzione said. Buying Motorola Home will diversify Arris’s sales so that five accounts supply half its revenue.

“This is a transformational deal for us,” he said. “There’s significant earnings accretion.”

The deal will immediately add to per-share earnings, excluding certain costs, Arris said.

Mountain View, California-based Google, also owner of the world’s most popular Internet search engine, said in August that it would cut 4,000 Motorola workers and close about a third of its 90 facilities as part of a plan to restore the hardware firm’s leadership in the mobile market.

Google’s share of the smartphone market will slip to 63.8 percent in 2016 from 68.3 percent this year for all devices running the company’s Android software, according to a report from research firm IDC. Apple’s iPhone will rise to 19.1 percent from 18.8 percent, staying in second place.