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CommScope Makes ‘Transformative’ Acquisition of TE

February 3, 2015

By J. Sharpe Smith —

February 3, 2015 — In a transaction worth $3 billion, CommScope has acquired TE Connectivity’s telecom, enterprise and wireless businesses. TE Connectivity’s assets will help Commscope diversify, and increase its presence in the Europe, Middle East, Africa and Asia Pacific regions.

“This is an important and transformative acquisition for CommScope, bringing together complementary geographic and customer coverage, products and technologies,” said Eddie Edwards, CommScope president and CEO.

The transaction is expected to diversify the markets served by CommScope, as well as expanding its geographic presence. In particular, CommScope will expand into the adjacent wireline telecom networks/fiber-to-the-X (FTTx) market, as well as meeting the steadily growing demand for broadband services. Further, TE Connectivity’s fiber technology is expected to help CommScope better address the transition to fiber deeper into networks and data centers.

“With these purchases, Commscope will be a more diversified company, both in terms of products and geographic reach,” Edwards said. “This transaction creates enhanced scale with a combined, diversified portfolio that we believe is well positioned to take advantage of opportunities in the marketplace. We will be in a better position to become a global leader in fiber technology.”

With the purchase, CommScope’s dependence on its wireless segment will drop to 46 percent of sales from 65 percent. Enterprise sales are projected to increase to 26 percent, compared with 22 percent. But the biggest growth will be in broadband connectivity, which more than doubles to 28 percent from 13 percent.

“In order for mobile broadband data, social media, last mile service and Big Data to grow, they will need a next-generation communications infrastructure,” Edwards said. “The combined company will have the tools necessary to build this kind of infrastructure and help customers meet the growing need for bandwidth. Even though we expect continued volatility in the communications infrastructure market, individuals and enterprises around the world are hungry for bandwidth.”

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