Amphenol will buy CommScope’s outdoor and indoor cellular infrastructure units for $2.1 billion
CommScope has struck a deal to sell its Distributed Antenna Systems (DAS) business unit and its Outdoor Wireless Networks (OWN) unit to Amphenol for about $2.1 billion.
The transaction is expected to close in the first half of next year. CommScope’s DAS unit focuses on indoor cellular infrastructure for campuses, venues and enterprises, while its OWN unit was part of its Networking, Intelligent Cellular & Security Solutions (NICS) unit; the rest of that unit, which remains with CommScope, includes Ruckus Wi-Fi.
The deal will leaves CommScope as a company primarily focused on the wireline infrastructure side of telecom and cable, although it retains its Ruckus enterprise Wi-Fi business. CommScope has been undergoing a strategic shift since 2021, when it kicked off its “CommScope NEXT” strategy under which it began reallocating its resources to businesses units that offer the most potential value in the near- and long-term, and jettisoning others. CommScope initially reorganized its business units in the wake of its $7.4 billion acquisition of Arris, which closed in 2019.
“CommScope has a strong reputation for driving innovation and value for our customers. This transaction allows CommScope to increase focus and further strengthen its CommScope NEXT priorities with its remaining segments and business units,” said Chuck Treadway, CEO of CommScope. He continued, “We believe CommScope’s OWN and DAS businesses are positioned to continue to perform well under Amphenol’s leadership.”
CommScope has been also looking to trim down billions of dollars in debt and in particular, faces $1.27 billion that will be coming due in June 2025. “We continue to evaluate alternatives, including asset sales to address the 2025 maturity and beyond,” said CFO Kyle Lorentzen on the company’s first quarter 2024 call with investors. “We’re extremely aware of our capital structure and liquidity,” Treadway told analysts on the same call, adding that the company would be managing those things “aggressively, for the benefit of our shareholders.”
In the first quarter of 2024, CommScope’s OWN saw its net sales down 24% from the prior year and continued losses expected as wireless operators pull back on 5G investment. The NICS segment, including Ruckus, saw sales drop as well, but Treadway said that despite a challenging 2024 ahead for Ruckus, CommScope still felt that it was “well-positioned to continue to take market share in the medium and long term.”
CommScope has also recently sold its home networks business to French telecom provider Vantiva, in a transaction that closed in January 2024 and resulted in CommScope receiving a payout up to $100 million plus a 25% stake in Vantiva. Meanwhile, in June, CommScope purchased Casa Systems’ cable assets for $45 million as part of an auction of Casa’s assets after the latter company declared bankruptcy. It has also been investing in increasing its domestic fiber production capabilities, in anticipation of federal funding through the Broadband Equity, Access and Deployment (BEAD) program.
CommScope will release its second quarter results on August 8.
