CommScope, a provider of infrastructure solutions for communications networks, has entered into a definitive merger agreement with alternative asset manager The Carlyle Group in a transaction valued at approximately USD3.9bn that will result in CommScope becoming a private company.
The transaction is expected to close in the first quarter of 2011.
Under the terms of the merger agreement, Carlyle will acquire all of the outstanding shares of CommScope common stock for USD31.50 per share in cash. This represents a premium of approximately 36 per cent over CommScope’s closing stock price on 22 October 2010, the last trading day prior to CommScope’s press release announcing a potential transaction between the parties.
“We are proud to enter into this agreement with Carlyle and believe this transaction is in the best interest of CommScope and our stockholders,” says Frank Drendel, chairman of the board and chief executive officer, CommScope. “After careful and thorough analysis, together with our independent advisors, our board of directors unanimously approved this transaction with Carlyle, which has a strong reputation and global network, and a proven record of success in acquiring and guiding companies like CommScope. Further, we are pleased that this transaction appropriately recognises the value of CommScope’s customer relationships, technology and solutions, financial management and global market position, while providing our stockholders with a significant cash premium for their investment.”
Bud Watts, managing director and head of Carlyle’s technology group, says: “We’ve known Frank, Eddie and other senior leaders at CommScope for many years. We have the greatest respect for them, CommScope’s many talented employees and the business they have built together. CommScope has a clear strategy, a culture of operational excellence and strong commitments to its employees, customers and partners around the world. We look forward to working with the ‘One CommScope’ team as it pursues the next phase of the company’s growth.”
CommScope’s board of directors has unanimously approved the agreement with Carlyle and recommends that CommScope stockholders approve the proposed merger and merger agreement. CommScope expects to hold a special meeting of stockholders to consider and vote on the proposed merger and merger agreement as soon as practicable after the mailing of the proxy statement to its stockholders.
The transaction is subject to the approval of CommScope’s stockholders, regulatory approvals and other customary closing conditions. The transaction has fully committed financing and is not subject to any condition with regard to the financing.
Equity financing will be provided by Carlyle Partners V, a USD13.7bn US buyout fund, and Carlyle Europe Partners III, a EUR5.4bn European buyout fund. Debt financing will be provided by J.P. Morgan.