The sale comes off the back of a financially poor first quarter for Commscope
Commscope has announced a deal to sell its mobile networks businesses to Amphenol for $2.1 billion.
Specifically, the deal includes the purchase of CommScope’s Outdoor Wireless Networks (OWN) segment as well as the Distributed Antenna Systems (DAS) business, which resides in CommScope’s Networking, Intelligent Cellular and Security Solutions (NICS) unit.
The acquired businesses are projected to generate full-year 2024 sales of approximately $1.2 billion and EBITDA margins of 25%.
Commscope says the deal will allow it to better manage its debt load, which currently stands at $9.3 billion. In its Q1 earning report published in May, net sales had declined by 30% to $1.17 billion, with management noting the “challenging” nature of the period, as it “continues to deal with lower demand.”
The sale of its mobile networking technology units will allow Commscope to focus on its fixed line products, a segment that was boosted by the acquisition of Casa earlier in the year.
Amphenol, on the other hand, says the deal will help complement their existing wireless portfolio.
“We are excited by the prospect of adding CommScope’s mobile networks businesses and their approximately 4,000 talented employees to the Amphenol family. CommScope’s advanced technologies in base station antennas and interconnect solutions, along with distributed antenna systems, significantly enhance our existing offerings,” said R. Adam Norwitt, President and CEO of Amphenol in a press release.
“In particular, we are encouraged that the businesses we are acquiring make up the former Andrew Corporation portfolio of products, a company with a rich history of innovation and technology leadership in the wireless industry. We look forward to supporting customers who are developing next-generation wireless networks around the world with these advanced solutions as well as our own existing complementary products.”
Norwitt also highlighted the alignment of the acquisition with Amphenol’s long-term growth strategy, placing emphasis on the better support the company will be able to provide to customers developing next-generation wireless networks globally.
Amphenol plans to finance the acquisition through a combination of cash and debt. The company confirmed that it is scheduled to discuss this acquisition in further detail during the company’s Q2 2024 earnings call later this month.
The transaction is subject to standard regulatory approval and is anticipated to close in the first half of 2025.
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