Andrew offloads satellite biz to private equity

Andrew Corp. agreed to sell its satellite communications business to Resilience Capital Partners in a deal that will allow Andrew to maintain an ownership stake in a new company that Resilience Capital Partners plans to establish.
Andrew will receive up to $39 million in cash as well as a 17% to 20% stake in the newly-formed company’s capital structure at closing, which has not yet been finalized.
The private-equity firm will pay Andrew $9 million in cash at closing, which is expected before the end of the year, and $5 million in seller’s notes that will mature three years after closing. Andrew also stands to receive up to $25 million in cash after three years if the new company meets certain financial targets.
Andrew said it plans to record a charge of approximately $15 million to $20 million related to the sale of the underperforming business, which is set to be renamed ASC Signal Corp. after the acquisition is finalized.
The satellite business expects sales of about $104 million this year, comprising 5% of Andrew’s overall revenues.
“We believe the satellite communications business and its people will have a brighter future and greater prospects for success as a standalone company with a singular focus of meeting the needs of its worldwide customers,” said Jude Panetta, group president of the business.
The move comes as a number of wireless operations move from the public to the private sector. Indeed, two private-equity firms are close to finalizing their acquisition of wireless operator Alltel Corp.