CommScope Holding Company, Inc. COMM recently inked a definitive agreement with the American electronics company Amphenol Corporation APH for the divestiture of its Outdoor Wireless Networks (OWN) segment and the Distributed Antenna Systems (DAS) business unit.
CommScope's DAS business is part of its Networking, Intelligent Cellular & Security Solutions segment, which also makes and sells RUCKUS Wi-Fi, small cell and private wireless solutions to support security applications in public and private networks.
The OWN segment specializes in comprehensive macro and outdoor small cell infrastructure portfolios, including RF path components, structures and intelligent power management solutions. These technologies are designed to deliver scalable performance and capacity for diverse cellular network deployments, ensuring flexibility for future demands.
The deal, subject to customary closing conditions and applicable regulatory approvals, is anticipated to close within the first half of 2025. Upon closing, Amphenol will likely pay approximately $2.1 billion in cash to CommScope.
The divestment will likely allow CommScope to increase its focus and further strengthen CommScope NEXT priorities with remaining segments and business units. By boosting its core portfolio, the company aims to enhance its operational efficiency for long-term sustainable growth.
The acquisition is expected to be accretive to Amphenol’s earnings in the first full year after closing, excluding acquisition-related costs. The buyout is also likely to support Amphenol’s long-term growth and balanced end-market exposure across all areas of the electronics market with healthy growth dynamics.
Leveraging its state-of-the-art technology, CommScope continues to innovate in wired and wireless networks, crucial for the evolving demands of 5G technology and network convergence. Its product portfolio is specifically designed to assist global service providers in efficiently deploying fiber networks, bolstering its long-term growth prospects. The company also continues to be one of the leading suppliers of intelligent antenna platforms for FirstNet deployments.
Shares of CommScope have lost 65.1% over the past year compared with the industry’s decline of 47.8%.
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Zacks Rank and Key Picks
CommScope currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader industry have been discussed below.
Ooma, Inc. OOMA offers cloud-based communications solutions, smart security and other connected services. The company’s smart software-as-a-service and unified-communications-as-a-service platforms serve as a hub for seamless communications and networking infrastructure applications. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter average earnings surprise of 8.90%. In the last reported quarter, Ooma delivered an earnings surprise of 27.27%.
Telephone and Data Systems, Inc. TDS, sporting a Zacks Rank of 1, provides wireless products and services, cable and wireline broadband, TV and voice services to approximately 6 million customers in Chicago.
In the last reported quarter, TDS delivered an earnings surprise of 145.45%.
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Free: See Our Top Stock and 4 Runners Up >>Amphenol Corporation (APH) : Free Stock Analysis Report
Telephone and Data Systems, Inc. (TDS) : Free Stock Analysis Report
CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
Ooma, Inc. (OOMA) : Free Stock Analysis Report
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