News
CommScope Completes Transformational Acquisition of TE Connectivity’s Telecom, Enterprise and Wireless Businesses
September 2015 by Marc Jacob
CommScope Holding Company, Inc. has completed its previously announced acquisition of TE Connectivity’s Telecom, Enterprise and Wireless businesses, a leader in fiber optic connectivity for wireline and wireless networks.
The all-cash transaction, valued at approximately $3 billion, strengthens CommScope’s position as a leading communications infrastructure provider with deeper resources to meet the world’s growing demand for network bandwidth. This transaction creates a stronger company with greater innovation, employee talent and overall capabilities to serve customers in four major areas:
• Indoor and outdoor wireless networks;
• Data centers and central offices;
• Connected and efficient buildings; and
• Access and backhaul networks.
CommScope expects to realize more than $150 million in annual synergies in 2018, which includes more than $50 million in 2016. CommScope expects to drive synergies across all areas of the company, including sales, marketing, general and administration, operations, and research and development. The transaction is expected to be in excess of 20 percent accretive in 2016 on a pro forma basis, excluding purchase accounting charges, integration costs and other special items.
The new CommScope has approximately 25,000 employees, with a more significant presence in all major geographic regions. Pro forma net sales (for the 12-month period ended June 30, 2015) were approximately $5.3 billion and pro forma adjusted EBITDA (excluding anticipated synergies) was approximately $1 billion. The company now holds a portfolio of approximately 9,800 patents and patent applications, with research and development investment of more than $200 million a year.
For the near term, the newly-acquired TE Connectivity Broadband Network Solutions (BNS) businesses will be operated as one of CommScope’s business segments, alongside of the existing CommScope segments of Wireless, Enterprise and Broadband. David Redfern will continue in his current role as leader of the BNS team, reporting to CommScope Chief Operating Officer Randy Crenshaw.
The closing of the transaction follows the consummation of contemplated financing, regulatory approvals and other customary closing conditions.
Advisors: Allen & Company LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities and Deutsche Bank are serving as financial advisors to CommScope. Alston & Bird LLP, Latham & Watkins LLP, Baker & McKenzie and Jones Day are serving as legal advisors to CommScope.
