CommScope To Acquire Arris In Mega $7.4 Billion Communications Networks Deal
Network infrastructure provider CommScope confirmed it has inked a deal to buy telecommunications equipment maker Arris in an all-cash transaction worth $31.75 per share, or approximately $7.4 billion, including the repayment of debt.
Combined, the two companies said the deal will help shape communications networks of the future as it moves into new markets and focuses on network convergence, fiber, 5G, the Internet of Things, and rapidly changing network and technology architectures.
Private equity firm The Carlyle Group also re-established its ownership position in CommScope and committed to a $1 billion minority investment that CommScope will use to finance the deal. After buying CommScope in 2011, the firm took the company public in 2013 and sold off its remaining shares in 2016.
Arris focuses on broadband and video and wireless technology through hardware, software and services. The company has been successful in building customer premises equipment, such as broadband modems and video set-top boxes. Arris also offers enterprise networking and cloud solutions, including its Ruckus Networks portfolio. Suwanee, Ga.-based Arris is Ruckus’ parent company.
"Arris and CommScope have complementary products and services. CommScope is already a leader in communications networking, an area Arris has been rapidly developing. Our networking businesses—on both the Arris and Ruckus sides—add important new options to CommScope's current portfolio. And the rest of Arris establishes a key cornerstone of the connected future," said Arris CEO Bruce McClelland in a blog post on the deal Thursday morning.
CommScope said the acquisition will enable it to enter new markets and serve a more diverse set of customers.
“CommScope and Arris will bring together a unique set of complementary assets and capabilities that enable end-to-end wired and wireless communications infrastructure solutions that neither company could otherwise achieve on its own. 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," CommScope President and CEO Eddie Edwards said in a statement.
Via the terms of the deal, Edwards will continue as president and CEO of CommScope, with Arris’ McClelland and other members of the Arris leadership team joining the combined company. The company will be based in CommScope's headquarters in Hickory, N.C., but the company will maintain a significant presence in Suwanee.
The two companies said CommScope and Arris together would create a company with approximately $11.3 billion in revenue and adjusted EBITDA of approximately $1.8 billion, based on results for the two companies for the 12 months ended Sept. 30.
The deal, which is expected to close during the first half of 2019, is subject to regulatory approval.