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CommScope to buy Arris in $7.4 billion deal

CommScope
Acquisition   Chief executive officer Eddie Edwards

U.S. telecom equipment maker CommScope Holding said on Thursday it would buy set-top box maker Arris International Plc in a $7.4 billion deal to bulk up its business ahead of the global roll-out of 5G.


The offer price of $31.75 per share represents a premium of 14 percent over Arris' Wednesday close. Excluding debt, the deal is valued at about $5.69 billion.

CommScope shares slid more than 18 percent over concerns about the debt it would assume as part of the all cash-deal.

However, CommScope chief executive officer Eddie Edwards said in an interview the company was no stranger to funding transactions with debt.

"Leverage is something that we have dealt with in our past several times with the acquisitions that we have done," Edwards said. "It's something we are used to and we know how to take cost out of the businesses as we acquire them."

Both Arris' and CommScope's businesses have been challenged as customers view some of their products as more commoditized and being easily substituted.

 

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