CommScope Comes Back for Andrew
Andrew also rejected a rival takeover offer from ADC (Nasdaq: ADCT) at the same time. (See Andrew Stays Single – For Now and CommScope Crashes ADC's Party.)
CommScope, though, remained convinced that combining its fixed access assets (coaxial cable and the associated access nuts and bolts needed for access network builds) with Andrew's portfolio of wireless access equipment (antennas, power amplifiers, transmission towers, and so on) made sense.
So now it's back with an offer worth $2.6 billion, or $15 for each Andrew share -- a 16 percent premium on Andrew's closing price Tuesday -- with at least $13.50 of that being offered in cash. That's an offer the Andrew board has accepted.
Combined, the two companies generated revenues of nearly $3.8 billion in their 2006 fiscal years, and have 16,000 staff. In its year to September 30, 2006, Andrew reported revenues of $2.15 billion and a net loss of $34 million. CommScope reported revenues of $1.62 billion and a net profit of $130 million in its year to December 31, 2006.
CommScope believes it can generate annual cost savings of $90 million to $100 million by the end of the second full year after the deal closes, and will incur acquisition-related charges of $70 million to $80 million in the two years following the deal, which is set to close before the end of 2007.
CommScope, which believes the acquisition can add to its earnings in the first full year after the acquisition, also raised its second-quarter guidance slightly today, but that wasn't enough to keep the firm's share price from slipping $0.83, about 1.5 percent, to $54.33.
Andrew's share price, though, jumped $1.36, nearly 10.5 percent, to $14.34.
— Ray Le Maistre, International News Editor, Light Reading