CommScope announced on October 3 it has entered a deal to sell its Home Networks Business to Vantiva, which was formerly known as Technicolor. CommScope announced in 2021 it planned to divest the business unit, and said on October 3, “After assessing various strategic alternatives … CommScope determined that Vantiva is the best partner for this business.”
CommScope said it expects the transaction to be completed this quarter (Q4 2023), and stated the terms include CommScope taking a 25% stake in Vantiva at closing, and receiving an earnout of up to $100 million contingent on Vantiva achieving EBITDA equal to or exceeding €400 million in a given year over a 5-year period, as well as other thresholds. Vantiva’s stock, which is listed on the EURONEXT (Paris) market, closed at €0.15 in October 2 and was trading at €0.18 by mid-day October 3. That €0.18 share price put the company’s market capitalization at approximately €65.2 million, or US$68.3 million.
“This transaction structure allows CommScope to capture future upside from significant synergy value creation,” CommScope said, adding that it “will also have one representative join Vantiva’s board of directors, highlighting its commitment to Vantiva’s strategy.”
The Home Networks Business has delivered more than 300 million connected home devices worldwide, CommScope said, further describing the business as “a global leader in connected home devices, software and services. It provides reliable, secure, next-generation home networking solutions that are sustainably sourced to customers.”
“In Vantiva, we are confident that we have found the right buyer,” said CommScope chief executive officer Chuck Treadway. “Our Home Networks Business is currently in a challenging environment, and by combining these two businesses we believe it provides the best opportunity for future success. Additionally, both Home Networks and Vantiva share a similar vision … We see compelling financial and commercial reasons for the combination of these two businesses at this time.”
Vantiva’s CEO Luis Martinez-Amagao added, “This planned strategic acquisition represents a unique transformative opportunity for Vantiva. It will enable us to reinforce Vantiva’s Connected Home operations, accelerate our innovation roadmap and expand into new markets through additional customer partnerships. From a financial perspective, the acquisition of Home Networks will substantially increase the scale of our business while also generating synergies that will significantly strengthen our free cash flow generation potential.”