CommScope Completes Divestiture of Outdoor Wireless Networks and Distributed Antenna Systems Businesses to Amphenol Corporation

Rhea-AI Summary

CommScope (NASDAQ: COMM) has completed the sale of its Outdoor Wireless Networks (OWN) segment and Distributed Antenna Systems (DAS) business to Amphenol (NYSE: APH), following the definitive agreement announced on July 18, 2024.

The proceeds will be allocated to:

• Pay transaction fees and expenses
• Repay all outstanding amounts under the asset-backed revolving credit facility
• Partially repay 4.750% Senior Secured Notes due 2029
• Fully repay 6.000% Senior Secured Notes due 2026

The company's asset-backed revolving credit facility committed amount will be reduced to $750.0 million, subject to borrowing base limitations. The Senior Secured Term Loan's applicable margin is expected to decrease by 25 basis points. Additional details about the transaction's impact on fiscal year 2025 outlook will be provided during the next quarterly earnings call.

Positive

• Debt reduction through repayment of multiple credit facilities and notes
• 25 basis points reduction in Senior Secured Term Loan margin

Negative

• Reduction in revolving credit facility commitment to $750.0 million
• Divestiture of two business segments may impact future revenue streams

Insights

Financial Analyst

This strategic divestiture marks a pivotal moment in CommScope's financial restructuring efforts. The transaction serves multiple strategic objectives:

• Streamlining the business portfolio by divesting non-core assets
• Significant debt reduction across multiple instruments
• Improved financial flexibility through reduced interest expenses

The reduction in borrowing costs through the 25 basis point decrease in the Senior Secured Term Loan margin is particularly noteworthy, as it will generate ongoing interest savings. The restructuring of the asset-backed revolving credit facility to $750.0 million suggests a more focused approach to working capital management.

While the immediate impact is positive for the balance sheet, investors should monitor several key aspects:

• The potential impact on revenue and EBITDA following the divestiture
• The company's ability to maintain operational efficiency with a streamlined portfolio
• Future capital allocation strategy with improved financial flexibility

The timing of this transaction aligns with industry trends toward focused business models and deleveraging initiatives. The full financial impact, including the effect on 2025 outlook, will be important for investors to assess during the next earnings call.

CLAREMONT, N.C.--(BUSINESS WIRE)-- CommScope (NASDAQ: COMM), a global leader in network connectivity, announced today the closing of the transaction to sell its Outdoor Wireless Networks (OWN) segment and Distributed Antenna Systems (DAS) business to Amphenol Corporation (NYSE: APH).

The Company previously announced the signing of a definitive agreement for the transaction on July 18, 2024.

The proceeds from the sale will be used to pay fees and expenses associated with the transaction and to repay all outstanding amounts under the Company’s asset-backed revolving credit facility, to repay in part the Company’s 4.750% Senior Secured Notes due 2029 and to repay in full the Company’s 6.000% Senior Secured Notes due 2026. In connection with the repayment of all outstanding amounts under the Company's asset-backed revolving credit facility, the committed amount thereunder will be reduced to $750.0 million, subject to borrowing base limitations. Following these actions it is expected that applicable margin on the Company’s Senior Secured Term Loan will be reduced by 25 basis points.

The Company will provide additional information about the transaction’s impact on its fiscal year 2025 outlook during the next quarterly earnings call.

CommScope and the CommScope logo are registered trademarks of CommScope and/or its affiliates in the U.S. and other countries. For additional trademark information see https://www.commscope.com/trademarks. All other product names, trademarks and registered trademarks are property of their respective owners.

About CommScope

CommScope (NASDAQ: COMM) is pushing the boundaries of technology to create the world’s most advanced wired and wireless networks. Our global team of employees, innovators and technologists empower customers to anticipate what’s next and invent what’s possible. Discover more at www.commscope.com.

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This press release includes forward-looking statements that are based on information currently available to management, management’s beliefs, as well as on a number of assumptions concerning future events. Forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, which could cause the actual results to differ materially from those currently expected. In providing forward-looking statements, the company does not intend, and is not undertaking any obligation or duty, to update these statements as a result of new information, future events or otherwise.

Source: CommScope

View source version on businesswire.com: https://www.businesswire.com/news/home/20250203737791/en/

News Media Contact

Luke Hamer, CommScope

Luke.Hamer@commscope.com

Financial Contact

Massimo Disabato, CommScope

Massimo.Disabato@commscope.com

Source: CommScope

FAQ

What businesses did CommScope (COMM) sell to Amphenol ?

CommScope sold its Outdoor Wireless Networks (OWN) segment and Distributed Antenna Systems (DAS) business to Amphenol

How will CommScope (COMM) use the proceeds from the Amphenol sale?

The proceeds will be used to pay transaction fees, repay the asset-backed revolving credit facility, partially repay 4.750% Senior Secured Notes due 2029, and fully repay 6.000% Senior Secured Notes due 2026.

What is the new committed amount for CommScope's (COMM) revolving credit facility?

The committed amount under the asset-backed revolving credit facility will be reduced to $750.0 million, subject to borrowing base limitations.

How will the Amphenol transaction affect CommScope's (COMM) loan terms?

Following the transaction, the applicable margin on CommScope's Senior Secured Term Loan is expected to be reduced by 25 basis points.