CommScope stock up on Carlyle buyout news

CommScope Inc. (CTV) signed a definitive merger agreement with The Carlyle Group to become a private company. The deal, valued at $3.9 billion, is expected to close in the first quarter. CommScope stock was up on the news.
Under terms of the deal, Carlyle will acquire all of the outstanding shares of CommScope common stock for $31.50 per share in cash, a 36% premium over the company’s closing stock price on Oct. 25, the last trading day before talks between the two companies were made public.
“We are proud to enter into this agreement with Carlyle and believe this transaction is in the best interest of CommScope and our stockholders,” said Frank Drendel, CommScope chairman and CEO. “After careful and thorough analysis, together with our independent advisors, our board of directors unanimously approved this transaction with Carlyle, which has a strong reputation and global network, and a proven record of success in acquiring and guiding companies like CommScope. Further, we are pleased that this transaction appropriately recognizes the value of CommScope’s customer relationships, technology and solutions, financial management and global market position, while providing our stockholders with a significant cash premium for their investment.
“As a private company, we believe CommScope will have greater flexibility to focus on our long-term strategic direction as a global leader in infrastructure solutions for communications networks. Carlyle understands our industry and our business well, and will be a tremendous asset as we build upon our leadership position and continue to implement our strategic plan to deliver enhanced value to our customers around the world,” said Eddie Edwards, CommScope president and COO.
The merger must be approved by CommScope stockholders, as well as meet other regulatory approvals and conditions. The transaction has fully committed financing. Equity financing will be provided by Carlyle Partners V, a $13.7 billion U.S. buyout fund, and Carlyle Europe Partners III, a €5.4 billion European buyout fund; debt financing will be provided by J.P. Morgan.
CommScope may solicit superior proposals from third parties through Dec. 5, and may respond to unsolicited proposals.
CommScope also released third-quarter financial results. The company reported net income of $50.6 million on sales of $821.9 million for the quarter, which was better than the same quarter a year ago, when the company posted income of $45.8 million on revenues of $750.4 million.
Income figures for the quarter include $15.2 million in after-tax charges for the amortization of purchased intangibles and $2.5 million in restructuring costs, as well as a $3.7 million after-tax gain on the sale of a distribution center in Singapore. Excluding these items, adjusted income was $64.6 million. This compares to adjusted earnings in the year-ago quarter of $63.3 million.
CommScope, Inc., a global leader in infrastructure solutions for communications networks, reported sales of $821.9 million and net income of $50.6 million, or $0.49 of earnings per diluted share, for the quarter ended September 30, 2010.