In an effort to expand its geographic reach and business portfolio, CommScope Holding announced this morning that it was buying TE Connectivity’s telecom, enterprise and wireless businesses for about $3 billion in cash.
The deal included Switzerland-based TE’s telecommunications, enterprise networks and wireless businesses, which generated $1.9 billion in annual revenue last year.
“This is an important and transformative acquisition for CommScope, bringing together complementary geographic and customer coverage, products and technologies for the benefit of our stockholders, customers and employees,” said Eddie Edwards, CommScope president and chief executive officer. “This transaction has many clear strategic and financial benefits for all of our stakeholders. It creates enhanced scale with a combined, diversified portfolio that we believe is well-positioned to take advantage of opportunities in the marketplace.
“We look forward to welcoming the TE Connectivity businesses to CommScope, which will bring top talent, strong customer relationships in growing markets and a robust pipeline of innovations. CommScope has a strong track record of disciplined strategic acquisitions and successful integrations, and we look forward to working with the TE Connectivity team to bring these assets together as cohesively and expeditiously as possible.”
Hickory, North Carolina-based CommScope said that it expected to realize more than $150 million in annual savings starting in the third year after the transaction’s closing.
The deal, which has been approved by both companies’ boards, is slated to close by the end of this year once it passes regulatory approvals and other customary closing conditions. CommScope expects to finance the transaction through the use of cash on hand and up to $3 billion of incremental debt, and has received debt financing commitments from J.P. Morgan Securities LLC, BofA Merrill Lynch, Deutsche Bank and Wells Fargo.
