CommScope to buy TE Connectivity's Network Solutions unit: WSJ

Jan. 27, 2015
The Wall Street Journal reported late January 26 that CommScope is on the verge of buying the Network Solutions business unit of TE Connectivity for approximately $3 billion. Neither company has confirmed the story, although TE Connectivity is scheduled to report results of its fiscal first quarter tomorrow, January 28.

The Wall Street Journal reported late January 26 that CommScope is on the verge of buying the Network Solutions business unit of TE Connectivity for approximately $3 billion. Neither company has confirmed the story, although TE Connectivity is scheduled to report results of its fiscal first quarter tomorrow, January 28.

TE Connectivity would retain its submarine network business, according to the Journal's story. The rest of the unit develops and markets terminals and connector systems, fiber-optic components and modules, wire and cable products, racks and panels, and products for wireless applications. The entire Networks business garnered $2.9 billion in fiscal 2014, making it third in revenue among the company's four reporting segments.

Like TE Connectivity's Network Solutions business unit, CommScope addresses both the telecom and data center/enterprise markets, although it provides systems-level products in addition to cables and accessories. If the report is true, the acquisition would represent a huge investment on the part of CommScope, in light of the fact that Carlyle Group paid $3.9 billion to acquire all of CommScope in 2011 (see "Carlyle Group to take CommScope private"). This fact has led some analysts to doubt the veracity of the WSJ story.

"Although we believe CommScope management seeks accretive acquisitions to improve growth and diversification, such a deal seems larger than what we might have imagined," wrote Simon Leopold of Raymond James in a note this morning. "In its last quarter, CommScope had $616 million of cash and $2.7 billion of long-term debt; our model forecasts it generating over $400 million of free cash flow in 2015. Although we cannot rule out CommScope's acquiring TE's Network unit, we see this as a large deal with uncertain prospects and imagine smaller accretive deals, even a smaller portion of TE's Networks unit, are more likely for CommScope."

For more information on fiber-optic cable and suppliers, visit the Lightwave Buyer's Guide.

About the Author

Stephen Hardy | Editorial Director and Associate Publisher

Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.

Contact Stephen to discuss:

  • Contributing editorial material to the Web site or digital magazine
  • The direction of a digital magazine issue, staff-written article, or event
  • Lightwave editorial attendance at industry events
  • Arranging a visit to Lightwave's offices
  • Coverage of announcements
  • General questions of an editorial nature

Sponsored Recommendations

Transforming the metro network and the evolution of the "Digital Service Provider"

March 4, 2025
Join experts at EXFO and Ekinops in this webinar that will review the evolving metro-centric requirements and the technologies emerging to meet them.

AI and Network Convergence: Transforming Global Connectivity

March 7, 2025
In today’s hyperconnected world, rolling out and managing profitable, high-performance networks for access and transport will require innovative architectural approaches. The ...

Unveiling the Synergy Between AI and Optical Networking

March 12, 2025
Join us for an engaging discussion with industry experts on the intersection of AI and optics. Moderated by Sean Buckley, editor-in-chief of Lightwave+BTR, this panel will explore...

On Topic: Fiber - The Rural Equation

Oct. 29, 2024
RURAL BROADBAND:AN OPPORTUNITY AND A CHALLENGE The rural broadband market has always been a challenge for service providers. However, the recent COVID-19 pandemic highlighted ...