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CommScope to buy Arris
Posted on Thursday, 08 November 2018 15:21
US-based national network infrastructure provider CommScope Holding has agreed a purchase of UK-based telecommunications equipment manufacturer Arris International.
Under the terms of the deal, the buyer will pay USD 31.75 in cash per share in the business, thereby valuing the deal at around USD 7.40 billion, including the repayment of debts.
The offer represents a 14.2 per cent premium over Arris’ close of USD 27.79 on 7th November, the last trading day prior to the deal being announced.
Completion of the takeover remains subject to a certain closing conditions, as well as the green light from regulatory bodies and expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
Closing is expected to follow during the first half of next year.
Eddie Edwards, chief executive at CommScope, said the acquisition represents the best way to generate value for shareholders, adding that both parties’ existing operations will complement one another.
These sentiments were echoed by Bruce McClelland, his counterpart at Arris.
The enlarged business resulting from the deal would have annual revenue of around USD 11.30 billion and adjusted earnings before interest, taxes, depreciation and amortisation of about USD 1.80 billion, based on results for the year to 30th September 2018.
Private equity giant Carlyle is supporting CommScope’s acquisition of Arris with a USD 1.00 billion injection and will take a minority stake in the target as a consequence.
The buyer also announced its financial results for the third quarter of 2018 today; it posted sales of USD 1.15 billion over the three months, compared to USD 1.13 billion in the same period of 2017.
Net income for the quarter stood at USD 64.00 million, up from USD 51.00 million in Q3 2017.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 132 deals targeting audio and video equipment manufacturing companies announced worldwide since the beginning of 2018.
The largest of these was worth USD 185.08 million and involved Kaga Electronics picking up Fujitsu Electronics.
© Zephus Ltd