By Evan Matsumoto
HICKORY DAILY RECORD
CommScope, a multinational communications company based in Hickory, reached a deal worth $3B to acquire TE Connectivity's Broadband Network Solutions, the companies announced Wednesday.
The deal is expected to drive profitable growth and broaden CommScope's position as an infrastructure provider. It also will bolster the Hickory business, adding 10,000 employees and 65 facilities, and provide greater geographic and business diversity. CommScope will gain about 7,000 patents and patent applications from the deal.
CommScope expects the transaction to close by the end of 2015, as it's still subject to consummation of contemplated financing, regulatory approvals and other customary closing conditions. But in a Wednesday phone call, Rick Aspan, vice president of corporate communications for CommScope, said the company is excited about the deal.
"We think it's a great opportunity for us to meet the growing bandwidth demand that's happening out there in the world," Aspan said.
Networks across the world are being strained by the growing demand for mobile devices, Internet services and streaming movies, Aspan said, and the acquisition of TE Connectivity's BNS will help CommScope adapt to a growing market.
"We feel that the businesses from TE Connectivity are a perfect complement to our efforts to help those customers address those needs," Aspan added.
Scott Millar, president of the Economic Development Corp., said in a phone call Wednesday the move doesn't really affect the city of Hickory or Catawba County, at least right now. But the deal shows CommScope is strong and, Millar said, further centralizes the company's position in the global marketplace.
TE Connectivity, generated annual revenues of $1.9 billion in its last fiscal year from its BNS businesses: $1.1 billion from telecom, $627 million from enterprise and $164 million from wireless. The company has a strong presence in Europe, the Middle East, Africa and Asia, a new release said.
This isn't the first big acquisition by CommScope, though. In 2004, the company bought Avaya's Connectivity Solutions business. Then in 2007, CommScope acquired Andrew Corp., which was headquartered near Chicago. Today, Andrew Crop. is "essentially" CommScope's wireless business, Aspan said — and it makes up about 65 percent of the company's sales.
CommScope will finance the deal with cash on hand and up to $3 billion of incremental debt. The deal has been approved by the board of directors of both companies.
Millar said Wednesday's agreement reminded him of an old saying.
"If you're not ripening, You're rottening," he said. "And these guys are continuing to ripen."