US telecoms infrastructure provider CommScope has agreed to buy the broadband network solutions (BNS) unit of Swiss components manufacturer TE Connectivity for US$3bn.
The BNS business, which comprises TE’s telecoms, enterprise networks and wireless…
US telecoms infrastructure provider CommScope has agreed to buy the broadband network solutions (BNS) unit of Swiss components manufacturer TE Connectivity for US$3bn.
The BNS business, which comprises TE’s telecoms, enterprise networks and wireless businesses, posted US$1.9bn in revenues in 2014, the companies said in separate statements.
CommScope expects that the deal, which does not include TE’s subsea communications or data communications businesses, will enable it to increase its footprint across EMEA and the Asia Pacific regions.
The acquisition will provide CommScope with the opportunity “to expand into the adjacent wireline telecom networks/fibre-to-the-X (FTTx) market and meet the steadily growing demand for broadband services in developed and emerging markets”, the company said.
The deal value represents approximately 10x adjusted EBITDA. CommScope is looking to finance the transaction with a combination of cash on hand and up to US$3bn debt. It has received debt financing commitments from JP Morgan, BofA Merrill Lynch, Deutsche Bank and Wells Fargo.
Allen & Company, JP Morgan, BofA Merrill Lynch and Deutsche Bank served as financial advisers to CommScope, while Alston & Bird, Latham & Watkins, Baker & McKenzie and Jones Day acted as legal advisers.
Centerview Partners, Goldman Sachs and Citi provided financial advisory to the seller, while Simpson Thacher & Bartlett, Allen & Overy and Sutherland Asbill & Brennan served as legal advisers.
“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,” Eddie Edwards, CommScope’s CEO, commented.
TE Connectivity chairman and CEO Tom Lynch said the majority of the sale proceeds will be used for its share repurchase programme, as well as to finance acquisitions and organic growth.
The transaction is expected to close by 31 December 2015, subject to customary closing conditions and regulatory approvals.
North Carolina-based CommScope, which is listed on the Nasdaq, is a provider of telecoms infrastructure solutions for wireless, business enterprise and residential broadband networks.
