CommScope has announced plans to sell its Home Networks business division to Vantiva.

The company has revealed that as part of the transaction, it's acquired a 25 percent stake in French technology company Vantiva, formerly known as Technicolor.

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CommScope has been looking to separate its Home Networks business - which provides Wi-Fi-based home networking solutions, devices, and services - since April 2021, as part of its CommScope NEXT initiative to drive portfolio optimization.

In a statement announcing the deal, the company said that Vantiva provided the best partner for this business.

On top of taking a 25 percent stake in Vantiva, CommScope said the deal includes an earnout of up to $100 million, contingent upon Vantiva achieving EBITDA equal to or exceeding €400m ($419m) in a given year over five years and meeting certain other thresholds.

“For the past two years, we have methodically and thoughtfully considered the strategic alternatives for our Home Networks business which would provide the highest value for our shareholders and the best partner to support our customers. In Vantiva, we are confident that we have found the right buyer," said Chuck Treadway, CommScope CEO.

He continued: "Our Home Networks business is currently in a challenging environment, and by combining these two businesses we believe it provides the best opportunity for future success. Additionally, both Home Networks and Vantiva share a similar vision, and value innovation, customer service, and developing products of the highest quality. We see compelling financial and commercial reasons for the combination of these two businesses at this time, and we are excited about the future opportunities for our employees, customers, and partners around the world.”

Vantiva - formerly Technicolor, Thomson, and Thomson Multimedia - provides broadband, video, and IoT solutions.

“This planned strategic acquisition represents a unique transformative opportunity for Vantiva,” said Luis Martinez-Amago, CEO of Vantiva.

“It will enable us to reinforce Vantiva’s Connected Home operations, accelerate our innovation roadmap, and expand into new markets through additional commercial partnerships. From a financial perspective, the acquisition of Home Networks will substantially increase the scale of our business while also generating synergies, which will significantly strengthen our free cash flow generation potential. This will result in a value-enhancing transaction benefiting all stakeholders, including end-consumers, customers, employees, shareholders, and lenders."

The sale is expected to complete by the end of 2023, but is subject to regulatory approvals and approval by Vantiva shareholders.