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Carlyle Snaps Up CommScope for $3.9B

Michelle Donegan
LR Cable News Analysis
Michelle Donegan
10/27/2010

As expected, CommScope Inc. has agreed to a takeover by The Carlyle Group LLC in a $3.9 billion that will result in the broadband and wireless equipment maker becoming a private company.

CommScope on Monday said it was talking to the private equity investment firm. The announcement sent its share price soaring as much as 30 percent Monday morning. (See CommScope, Carlyle Strike $3.9B Merger , CommScope Rockets on Takeover Talks , and CommScope in Buyout Talks.)

Under the terms of the deal, Carlyle will acquire all the outstanding shares of CommScope's common stock for $31.50 per share in cash, which is a premium of about 36 percent over CommScope's closing share price on Friday, Oct. 22.

It is expected that CommScope chairman and CEO Frank Drendel and president and COO Eddie Edwards, as well as other members of the executive management team, will continue with the company when the deal is finalized. The transaction is expected to close in the first quarter of 2011.

CommScope, in addition to announcing that it had agreed to be taken private, also posted third-quarter results today. The company reported revenues of $822.9 million for the third quarter, up 9.5 percent compared with the same period last year, but down 1.9 percent compared to the second quarter. Net income in the third quarter was $50.6 million, or $0.49 earnings per diluted share.

Drendel noted that North American wireless spending remained strong in the period, with CommScope's Enterprise segment performing well across all major product groups and geographies. CommScope, he added, is also seeing "modest sequential improvement" in India's wireless infrastructure market.

CommScope shares were up 3.67 percent ($1.11) to $31.33 each in early trading Wednesday. — Michelle Donegan, European Editor, Light Reading Mobile

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