CommScope to acquire TE Connectivity
Acquisition, slated for a Q4 2015 go-ahead, to be made with a $3bn cash payment
CommScope announced today that it has agreed to acquire TE Connectivity's telecom, enterprise and wireless businesses in a $3bn cash transaction.
TE Connectivity specialises in fibre-optic technology for wireline and wireless networks, and generated revenues of around $1.9bn in its fiscal year ended September 26, 2014. Its telecom business earned $1.1bn, while its enterprise and wireless businesses earned $627m and $164m, respectively.
The rationale behind the acquisition, the vendor said, was that it would help it enter into "attractive adjacent" markets - namely wireline telecom networks and fibre-to-the-X. It will also give CommScope a greater geographic reach and a broader business portfolio, the vendor added.
The acquisition has been approved by both companies' boards of directors, CommScope said.
"This is an important and transformative acquisition for CommScope, bringing together complementary geographic and customer coverage, products and technologies for the benefit of our stockholders, customers and employees," said Eddie Edwards, CEO of CommScope.
"This transaction has many clear strategic and financial benefits for all of our stakeholders. It creates enhanced scale with a combined, diversified portfolio that we believe is well-positioned to take advantage of opportunities in the marketplace."
The acquisition will also provide CommScope with around 7,000 patents and patent applications. The vendor also hopes to use TE Connectivity's fibre technology to address a transition to fibre deployments deeper into networks and data centres.
"We look forward to welcoming the TE Connectivity businesses to CommScope, which will bring top talent, strong customer relationships in growing markets and a robust pipeline of innovations," added Edwards.
"CommScope has a strong track record of disciplined strategic acquisitions and successful integrations, and we look forward to working with the TE Connectivity team to bring these assets together as cohesively and expeditiously as possible."
The transaction is expected to close by the end of 2015 subject to consummation of contemplated financing, regulatory approvals and other customary closing conditions. Upon its completion, Edwards will continue to lead the company.