CommScope acquiring TE Connectivity networking biz

On January 28 CommScope and TE Connectivity announced that they have agreed to a deal in which CommScope will acquire TE Connectivity's networking business, which comprises its telecommunications, enterprise, and wireless units.

From the February, 2015 Issue of Cabling Installation & Maintenance Magazine

On January 28 CommScope and TE Connectivity announced that they have agreed to a deal in which CommScope will acquire TE Connectivity's networking business, which comprises its telecommunications, enterprise, and wireless units.

There is more to CommScope than we cover in this enterprise- and data-center-communications magazine, just as there is more to TE Connectivity than we cover. Even so, this $3-billion acquisition, which should close sometime in calendar year 2015, is, as Vice President Joe Biden might say, "a big [blanking] deal." In CommScope's announcement, it stated, "TE Connectivity's leading fiber technology is expected to help CommScope better address a transition to fiber deployments deeper into networks and data centers as consumers and businesses generate increasing bandwidth requirements. With these additional innovative solutions, CommScope expects to solve more customer communications challenges, while providing greater opportunities to its business partners."

I immediately have a couple gut-level reactions to the deal, as opposed to those of a share-value-first mindset you've probably already seen on CNBC. The first thing that struck me was CommScope's comment that the acquisition will better balance the business activity of its own portfolio, which includes wireless, enterprise, and broadband connectivity. For the 12 months ending September 30, 2014, the company said, wireless accounted for 65 percent of its business, enterprise 22 percent, and broadband connectivity 13 percent. Incorporating the TE Connectivity business, that breakdown will look more like wireless at 46 percent, enterprise at 26 percent, and broadband connectivity at 28 percent. At a time when it's easy to speculate that cables are going away and wireless is taking over the communications world, the biggest player we know has just taken action (to put it mildly) that will make cabling products and technologies bigger parts of its business.

My other reaction comes purely from having observed this industry for the number of years I have. What years ago were four companies in our industry will soon be one. There used to be CommScope, AT&T/Lucent/Avaya (with the Systimax brand), AMP, and ADC. Tyco acquired AMP; CommScope acquired Systimax. Then Tyco spinoff TE Connectivity acquired ADC. At one point ADC was going to acquire Andrew, but CommScope eventually did. Now they'll all be together. Thank goodness for interoperability. And lifetime warranties.

Patrick McLaughlin
Chief Editor
patrick@pennwell.com

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