How Hickory-based CommScope expects to benefit from its latest $7.4B acquisition

The Charlotte Business Journal

By Ken Elkins, Senior Staff Writer Nov 8, 2018, 1:07pm
Hickory-based CommScope is paying $7.4 billion to buy a cable set-top box maker that would more than double the size of the broadband network equipment company.
CommScope’s purchase of Arris International plc (NASDAQ: ARRS) becomes the fourth “transformational” acquisition for the company in the last 10 years.
Insiders at the Hickory headquarters say Eddie Edwards, CEO of CommScope (NASDAQ: COMM), and others are excited about the deal, which one person says will “shape the future of wired and wireless networks.”
The transaction for Arris will bring the 12-month trailing revenue for the combined companies to $11.3 billion, compared with $4.5 billion for CommScope alone. Employment would grow to 30,000 at the merged companies from CommScope’s current 22,000 employees.
“With Arris, we will access new and growing markets, and have greater technology, solutions and employee talent that will provide additional value and benefit to our customers and partners,” continues Edwards, speaking about the deal.
One report says Suwanee, Georgia-based Arris derives about 35% of its revenues from cable set-top boxes that translates outside cable signals into information that TV, internet and other services can understand.
To make the purchase possible, The Carlyle Group (NASDAQ: CG) will re-invest $1 billion in CommScope, bringing it a minority equity stake in the company once again. Carlyle Group, which exited the company in late 2016, had been instrumental in taking CommScope private in 2010, buying the company for $4 billion.
In its latest big deal, CommScope bought most of Swiss-based TE Connectivity’s broadband network solutions business, a $3 billion purchase that doubled CommScope’s workforce to 25,000. That transaction was completed in August 2015, also bringing about 60 TE Connectivity facilities around the world under the CommScope umbrella.
CommScope says its newest deal will unlock the possibility for growth in the areas of small-cell solutions, wired and wireless communications and private networks for industry and other enterprises.
At last count, CommScope had about 1,600 employees in Catawba County — at its headquarters that overlooks Interstate 40 and at production facilities. CommScope combines raw fiber-optic fibers into cables and makes specialized connectors that bring the signal into homes, neighborhoods, data centers and cell towers.