The deal will help North Carolina-based CommScope expand, growing its business in the Europe, Middle East, Africa and Asia Pacific regions, and address the transition as bandwdith demands from consumers and businesses drive fiber deeper into networks and data centers. It also brings CommScope 10,000 people, 65 facilities and 7,000 patents and patent applications worldwide.
The transaction has been approved by the boards of directors of both companies, and is expected to close by the end of 2015 subject to normall regulatory approvals.
”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, CommScope president and chief executive officer (pictured).
“CommScope is a proven industry leader, and we believe it is the right company to lead our telecom, enterprise and wbusinesses forward,” said Tom Lynch, TE Connectivity chairman and chief executive officer.
The TE network business is a global player in fiber optic connectivity, and generated annual revenues of about $1.9 billion in 2014, including $1.1bn from telecoms and $627m from enterprise. Its current parent, TE Connectivity, designs and manufactures connectors, components and systems.
CommScope expects to finance the transaction through the use of cash and and up to $3 billion of new debt, which will be financed from JP Morgan Securities, BofA Merrill Lynch, Deutsche Bank and Wells Fargo.
By eliminating overlaps, CommScope hopes to realize more than $150 million in annual “synergy” savings beginning by the third year following closing, which includes more than $50 million in the first full year.
CommScope has made quite a few acquisitions in the last decade: in January 2004, CommScope doubled in size, through buying the network connection business of Avaya, incdluding its Systimax business and manufacturing plants in Ireland and Omaha, Nebraska. of the USA to its portfolio, the vendor doubled its company size. In December 2007, CommScope bought Andrew Solutions, adding last mile network products. solutions.
At a press conference last year in Shanghai, CommScope vice president for enterprise Ispran Kandasamy told Datacenter Dynamics that data centers is CommScope’s fastest growing business globally, hence its delivry of data center on demand (DCoD) services, and its acquisition of data center infrastructure management (DCIM) software provider iTRACS, and intelligent lighting products provider Redwood.
Edited by Peter Judge, DCD London