Carlyle Group CG 0.52% is reinvesting in CommScope Holding Co. to help the network infrastructure firm expand its wired and wireless communication networks. CommScope said Thursday it has agreed to buy telecommunications equipment maker Arris International PLC in an all-cash deal valued at about $4.93 billion. The company, which has also agreed to repay Arris’s debt, said Arris shareholders will receive $31.75 a share.
CommScope plans to finance the deal in part through a $1 billion investment from Carlyle. The private-equity firm bought CommScope in 2011, took it public in 2013 and sold off its remaining shares in 2016. This latest investment gives Carlyle a 16% stake in CommScope, the company said. The remainder of the deal will be financed with cash on hand and financing commitments from J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Deutsche Bank Securities LLC. The Arris deal is expected to close in the first half of next year. Upon completion, CommScope’s Eddie Edwards will remain president and chief executive, and Arris CEO Bruce McClelland will join the combined company. The combined company is expected to have sales of about $11.3 billion, based on financial results for the two companies for the 12 months ended Sept. 30. Arris had $6.7 billion in revenue over that period. On Thursday, CommScope also posted third-quarter earnings. The company said profit rose 25% to $63.8 million and sales climbed 2% to $1.15 billion. On an adjusted basis, the company earned 59 cents a share. Analysts were expecting adjusted per-share earnings of 66 cents and revenue of $1.22 billion. Shares of CommScope fell 10% while Arris’s stock rose 11% in premarket trading Thursday.