One of the biggest vendors in the telecom industry, CommScope, will sell the unit that manufactures its broadband gateways, pay TV set-tops and OTT players to France’s Vantiva, which rebranded from Technicolor last year.
Under terms of the deal, which is expected to close in the fourth quarter, CommScope will assume a 25% stake in Vantiva after selling its “Home Networks” unit. CommScope will also get an “earnout” of up to $100 million if Vantiva can achieve a EBITDA goal of €400 million (around $420 million) over a five-year period and meet “certain other thresholds.”
You can read CommScope’s deal announcement here.
CommScope's Home Networks unit generated $1.5 billion in revenue in the 12 months ended June 30. CommScope reported net sales of $330 million for the division in Q2, down 22% year over year, attributing the drop to “weak demand and challenging market conditions.”
No details were offered as to how many Home Networks employees from Hickory, North Carolina-based CommScope Vantiva might be keeping around. The unit will be combined with Vantiva’s Connected Home division, which generated annual revenue of $2.09 billion through June.
Vantiva did report its own 10% revenue dip for Connected Home through the first half of fiscal 2023.
CommScope had been shopping its Home Networks unit since April 2021.
“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,” CommScope CEO Chuck Treadway said in a statement.
“Additionally, both Home Networks and Vantiva share a similar vision, and value innovation, customer service, and developing products of the highest quality,” Treadway added.
“This planned strategic acquisition represents a unique transformative opportunity for Vantiva,” said Luis Martinez-Amago, CEO of Vantiva. “It will enable us to reinforce Vantiva’s Connected Home operations, accelerate our innovation road map and expand into new markets through additional commercial 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.”
