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CommScope agrees to $3.9M takeover

October 27, 2010

CommScope Inc. has agreed to be bought out by asset manager Carlyle Group for $3.9 billion, two days after announcing it was in takeover talks.

The company, one of the world's top infrastructure suppliers to wireless carriers, is being acquired for $31.50 a share, a 36 premium over its closing price before it announced it was in negotiations.

It's the same price CommScope gave Monday when it confirmed it was in talks with the Carlyle group. The deal is expected to close in the first quarter of 2011.

Chairman and CEO Frank Drendel and Eddie Edwards, CommScope's president and chief operating officer, are staying on to lead the company along with other executives.

Separately, the Hickory, N.C.-based company also reported its third-quarter net income rose 10 percent to $50.6 million, or 49 cents per share, from $45.8 million, or 45 cents per share, in the same period a year earlier.

Its adjusted earnings per share of 62 cents beat the average analyst estimate by a dime.

CommScope's revenue climbed 10 percent to $821.9 million from $750.4 million. Analysts polled by Thomson Reuters were expecting higher revenue of $840.5 million.

Drendel said wireless spending stayed "robust" in North America and the company's enterprise segment, which serves large businesses, "continued to deliver strong results across all major product groups and geographies."

"While the global economy remains challenging, popular devices like smart phones and tablets have created the demand for a mobile Internet," Drendel said in a statement.

CommScope also makes fiber-optic and other cables for telephone, cable and Internet service providers. Its customers include Alcatel-Lucent Inc., AT&T Inc. and Vodafone Group PLC, according to Capital IQ.

Carlyle invests in a broad range of industries, with about 8 percent of its holdings in consumer and retail companies. It closed on its $3.8 billion buyout of vitamin maker NBTY earlier this month.

Shares of CommScope climbed 98 cents, or 3 percent, to $31.20 in premarket trading Wednesday.

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