[August 28, 2015] |
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CommScope Completes Transformational Acquisition of TE Connectivity's Telecom, Enterprise and Wireless Businesses
CommScope Holding Company, Inc. (NASDAQ: COMM) has completed its
previously announced acquisition of TE Connectivity's (News - Alert) (NYSE: TEL)
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:
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Indoor and outdoor wireless networks;
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Data centers and central offices;
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Connected and efficient buildings; and
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Access and backhaul networks.
"We are excited to move forward as one company positioned for continued
success," said Eddie Edwards, CommScope
president and chief executive officer. "Together, we look to accelerate
industry innovation, solve more wired and wireless network challenges,
and better serve customers in more markets around the world. By uniting
our complementary solutions, technologies and geographic and market
coverage, we have created a stronger platform for competing successfully
around the world.
"With this acquisition, we will have significant new opportunities for
future sales growth and cost efficiencies to strengthen CommScope's
financial foundation. The addition of the TE businesses is expected to
immediately contribute to our profitable growth."
As previously announced, 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 approximatel 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 (News - Alert) (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.
"I welcome our new team members from TE Connectivity and look forward to
continuing to work closely with all employees at CommScope to ensure we
continue to deliver superior technology, solutions and services to our
customers and partners," Edwards said.
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 (News - Alert) 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.
About CommScope
CommScope (NASDAQ: COMM) helps companies around the world design, build
and manage their wired and wireless networks. Our network infrastructure
solutions help customers increase bandwidth; maximize existing capacity;
improve network performance and availability; increase energy
efficiency; and simplify technology migration. You will find our
solutions in the largest buildings, venues and outdoor spaces; in data
centers and buildings of all shapes, sizes and complexity; at wireless
cell sites and in cable headends; and in airports, trains, and tunnels.
Vital networks around the world run on CommScope solutions.
Forward Looking Statements
This communication contains forward-looking statements (including
within the meaning of the Private Securities Litigation Reform Act of
1995) concerning CommScope, the acquisition by CommScope of the Telecom,
Enterprise and Wireless businesses of TE Connectivity (the "BNS
Business") and other matters. These statements may discuss goals,
intentions and expectations as to future plans, trends, events, results
of operations or financial condition, or otherwise, based on current
beliefs of the management of CommScope as well as assumptions made by,
and information currently available to, such management. Forward-looking
statements may be accompanied by words such as "aim," "anticipate,"
"believe," "plan," "could," "would," "should," "estimate," "expect,"
"forecast," "future," "guidance," "intend," "may," "will," "possible,"
"potential," "predict," "project" or similar words, phrases or
expressions. These forward-looking statements are subject to various
risks and uncertainties, many of which are outside the control of
CommScope. Therefore, you should not place undue reliance on such
statements. Factors that could cause actual results to differ materially
from those in the forward-looking statements include the risk that the
BNS Business will not be integrated successfully into CommScope or that
CommScope will not realize estimated cost savings, synergies and growth
or that such benefits may take longer to realize than expected; failure
by CommScope to realize anticipated benefits of the acquisition; risks
relating to unanticipated costs of integration; risks from relying on TE
Connectivity for various critical transaction services for an extended
period; reductions in customer spending and/or a slowdown in customer
payments; failure to manage potential conflicts of interest between or
among customers; unanticipated changes relating to competitive factors
in the telecommunications industry; ability to hire and retain key
personnel; the potential impact of consummation of the acquisition on
relationships with third parties, including customers, employees and
competitors; ability to attract new customers and retain existing
customers in the manner anticipated; changes in legislation or
governmental regulations affecting CommScope and the BNS Business;
international, national or local economic, social or political
conditions that could adversely affect CommScope, the BNS Business or
their customers; risks associated with assumptions made in connection
with the critical accounting estimates, including segment presentation,
and legal proceedings of CommScope and/or the BNS Business; and the
international operations of CommScope and/or the BNS Business, which are
subject to the risks of currency fluctuations and foreign exchange
controls. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and
uncertainties that affect the businesses of CommScope and/or the BNS
Business, including those described in each of CommScope's and TE
Connectivity's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other documents filed from time to
time with the Securities and Exchange Commission. Except as required
under applicable law, the parties do not assume any obligation to update
these forward-looking statements.
Source (News - Alert): CommScope
View source version on businesswire.com: http://www.businesswire.com/news/home/20150828005279/en/
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