CommScope to Divest Home Network Unit to Focus on Core Business
CommScope to divest home network unit to focus on core business
CommScope to divest home network unit to focus on core business
CommScope to Divest Home Network Unit to Focus on Core Business
Commscope Holding Company, Inc. (COMM) recently announced that it has entered into an agreement with Vantiva SA, formerly Technicolor SA, to divest its Home Network business. This transaction is expected to be completed by the end of the year, subject to the fulfillment of mandatory closing conditions and regulatory approvals. The headquarters of the combined entity will be in Paris, France. Vantiva is a leading provider of innovative products and solutions for home entertainment.
Through this deal, CommScope will gain a stake in Vantiva, which will provide the company with an opportunity to earn a maximum cumulative amount of €100 million in cash, contingent upon Vantiva achieving EBITDA equal to or exceeding €50 million in a given fiscal year within the five years following the first full year post-acquisition. CommScope’s Home Network business will form an integral part of Vantiva’s Connected Home division.
Notably, CommScope’s Home Network and Vantiva’s Connected Home generated €1.4 billion and €1.2 billion in sales, respectively, for the month ending June 30. This buyout will significantly enhance Vantiva’s geographical footprint and expand its client base. Additionally, it is expected to generate excess of €100 million in pretax cash synergies driven by cost optimization initiatives and operational efficiencies.
CommScope has embarked on an initiative dubbed “CommScope NEXT,” a multifaceted program aimed at driving future growth, outpacing the market, optimizing business processes, and unlocking shareholder value. As part of this strategy, CommScope intends to separate its Home Network business by creating an independent, publicly traded entity through a tax-free spinoff.
This move will enable CommScope’s Home Network business to drive innovation and focus on go-to-market strategies, developing technologies for home consumer products backed by a resilient manufacturing model and restructured cost base. The spinoff would also provide the Home Network business with a dedicated research and development team responsible for stimulating growth in the connected home of the future.
With this divestment, CommScope will be able to realize its vision of becoming a focused technology company with a sound supply chain, committed to continuous improvement, and positioned as a preferred partner for telecommunications businesses across the industry. The company is moving towards operating more converged, multi-use network structures that combine voice, video, data, and communications over a single network. CommScope is dedicated to developing solutions designed to support wired and wireless network convergence, which is essential for the success of technology companies. Its portfolio of solutions, specifically designed to help global service providers efficiently deploy fiber technology, has the potential to revolutionize a wide array of industries, including autonomous vehicles, smart cities, remote healthcare, augmented and virtual reality, and industrial automation.