HICKORY, N.C., and WESTCHESTER, Ill. – Cable manufacturer CommScope Inc. said today that it will buy fellow manufacturer Andrew Corp. to create a global communications infrastructure powerhouse.
The boards of both companies have approved the $2.6 billion sale which values Andrew (which has more than twice the number of employees than Commscope) at $15 per share, at least 90% of which will be paid in cash, and is a 16% premium over the share price closing on Tuesday.
The move will create "a global leader in infrastructure solutions for communications networks," touts the press release, "including structured cabling solutions for the business enterprise; broadband cable and apparatus for cable television applications; and antenna and cable products, base station subsystems, coverage and capacity systems, and network solutions for wireless applications. The combination of the companies’ respective operations is expected to result in meaningful operating, cost and sales synergies, and other important benefits to shareholders, customers and employees, including, says the release:
• Building upon complementary global product offerings that will provide customers with a broader array of infrastructure solutions for video, voice, data and mobility;
• Expanding global distribution and manufacturing capabilities;
• Enhancing growth opportunities by combining marquee brands, innovative technologies, and global service models;
• Strengthening industry-leading R&D and intellectual property portfolio;
• Affording scale in procurement, logistics and manufacturing in an increasingly competitive market;
• Diversifying top-tier customer base; and
• Providing greater opportunities for employees as part of a larger, more diversified global corporation.
Based on CommScope’s and Andrew’s results for fiscal year 2006, on a pro forma basis, the combined companies would have had sales of approximately US$3.8 billion comprised of approximately 35% in wireless antenna and cable products; 29% in carrier and network solutions; 21% in enterprise products; and 15% in broadband/cable television solutions. The combined companies’ revenues on a geographic basis would have been approximately 57% in North America; 24% in Europe, the Middle East and Africa; 12% in Asia/Pacific Rim; and 7% in Latin America.
The combined company will have more than 2,200 global patents and pending patent applications and approximately 16,000 employees serving more than 130 countries.
