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  • CommScope Enters Into Merger Agreement With The Carlyle Group

    Published on October 29, 2010

    United States: CommScope, Inc. (NYSE: CTV), a global leader in infrastructure solutions for communications networks, has entered into a definitive merger agreement with global alternative asset manager The Carlyle Group in a transaction valued at approximately $3.9 billion 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 $31.50 per share in cash. This represents a premium of approximately 36% over CommScope’s closing stock price on Friday, October 22, 2010, the last trading day prior to CommScope’s Monday, October 25, 2010 press release announcing a potential transaction between the parties, and a premium of approximately 39% over the average closing share price of CommScope’s common stock for the 30 days ended October 22, 2010.

    “We are proud to enter into this agreement with Carlyle and believe this transaction is in the best interest of CommScope and our stockholders,” said 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 recognizes 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.

    “CommScope’s success is driven by our talented global workforce and I thank them for their tireless efforts to make CommScope the company it is today. Carlyle shares our confidence in CommScope’s future and will support our people in achieving our long-term goals.”

    Eddie Edwards, CommScope’s president and chief operating officer, said, “This transaction with Carlyle is a great outcome for CommScope’s employees, customers and partners. As a private company, we believe CommScope will have greater flexibility to focus on our long-term strategic direction as a global leader in infrastructure solutions for communications networks. Carlyle understands our industry and our business well, and will be a tremendous asset as we build upon our leadership position and continue to implement our strategic plan to deliver enhanced value to our customers around the world.”

    Bud Watts, managing director and head of Carlyle’s Technology Group, said, “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.”

    Cam Dyer, a Carlyle principal, said, “With strong leadership and clear secular growth drivers, CommScope’s long-term prospects are excellent. Carlyle will support CommScope’s continued investment in next generation solutions, more integrated product and service offerings, and superior customer service levels.”

    It is anticipated that upon completion of the transaction, Mr. Drendel and Mr. Edwards, along with other members of CommScope’s executive management team, will continue to lead the company.

    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 $13.7 billion U.S. buyout fund, and Carlyle Europe Partners III, a €5.4 billion European buyout fund; debt financing will be provided by J.P. Morgan.

    Under the merger agreement, CommScope may solicit superior proposals from third parties for a period of 40 calendar days continuing through December 5, 2010. In accordance with the agreement, CommScope’s board of directors, with the assistance of its advisors, intends to solicit superior proposals during this period. In addition, CommScope may, at any time, subject to the provisions of the merger agreement, respond to unsolicited proposals. CommScope advises that there can be no assurance that the solicitation process will result in an alternative transaction. To the extent that a superior proposal received prior to December 5, 2010 leads to the execution of a definitive agreement, CommScope would be obligated to pay a $43.3 million break-up fee to Carlyle. CommScope does not intend to disclose developments with respect to this solicitation process unless and until it determines it is appropriate to do so.

    Allen & Company LLC is serving as financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal advisor to CommScope in connection with the transaction. J.P. Morgan is serving as financial advisor to Carlyle, and Alston & Bird LLP and Latham & Watkins LLP are serving as Carlyle’s legal advisors.

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    1 Response for “ CommScope Enters Into Merger Agreement With The Carlyle Group ”

    • Tom Equihua says:

      I don’t have a problem with exposing corruption within the U.S. government and state/local governments. If U.S. government diplomatic correspondence is exposed I would likewise expect to see EU, Indian,Russian, Chinese, Brazilian, German, French, UK, etc., governmental and diplomatic correspondence leaked and exposed. There are obviously MANY non-U.S. do-gooders and one world citizen of the world type. I encourage each and ever one to do what they can to get their hands on and leak their respective government(s) confidential governmental and diplomatic correspondence. I for one would LOVE to know what’s going on behind the scenes at the EU in Brussels, Russia, China and so-on. A brave AMERICAN stood up to the plate and leaked U.S. ‘secrets’…where are the brave Brits, Euros, Russians, Chinese? I want to see something on the same scale as the U.S. leaks.

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