CommScope has entered into an agreement to sell its Distributed Antenna Systems (DAS) and Outdoor Wireless Networks (OWN) units to Amphenol for approximately $2.1 billion. This transaction, set to close in the first half of next year, encompasses both indoor and outdoor cellular infrastructure.
CommScope’s DAS unit is well-known for its indoor cellular solutions suitable for campuses, venues, and enterprises. Meanwhile, the OWN unit has been a significant part of the company’s Networking, Intelligent Cellular & Security Solutions (NICS) segment. Despite selling these units, CommScope will retain its enterprise Wi-Fi business, Ruckus, further steering its focus towards wireline telecom and cable infrastructure.
CommScope has been strategically realigning its portfolio through its “CommScope NEXT” initiative since 2021. This ongoing transformation aims to concentrate resources on high-value segments and exit less promising areas. “CommScope has a strong reputation for driving innovation and value for our customers. This transaction allows CommScope to increase focus and further strengthen its CommScope NEXT priorities with its remaining segments and business units,” said Chuck Treadway, CEO of CommScope.
Financially, this deal could help CommScope significantly. The company has been actively seeking ways to reduce its $1.27 billion debt due by June 2025. “We continue to evaluate alternatives, including asset sales to address the 2025 maturity and beyond,” said CFO Kyle Lorentzen. The $2.1 billion from Amphenol will aid in managing its capital structure and liquidity efficiently.
This divestiture follows several recent strategic moves by CommScope. Earlier this year, it sold its home networks business to the French telecom provider Vantiva, netting up to $100 million plus a 25% stake. Just last month, CommScope acquired the cable assets of Casa Systems post-bankruptcy for $45 million. The company is also boosting its fiber production capabilities domestically to align with U.S. federal funding opportunities through the Broadband Equity, Access and Deployment (BEAD) program.
However, it’s not all smooth sailing for CommScope. In the first quarter of 2024, its OWN segment experienced a 24% drop in net sales year over year due to reduced 5G investments by wireless operators. The NICS segment, including Ruckus, also saw a dip in sales. Despite these challenges, Treadway remains optimistic about Ruckus, believing it is well-prepared to increase market share in the medium and long term.
