CommScope again goes for Andrew in $2.6B deal

Less than a year after rejecting the company, infrastructure vendor Andrew Corp. announced a deal to be acquired by former suitor CommScope Inc. in a $2.6 billion transaction-substantially more than the purchase price the two companies discussed last year.
Back in 2006, ADC Telecommunications Inc. had offered to pay $6.97 per share for Andrew, but before the companies could seal the deal, CommScope came in with an offer of $9.50 per share. Andrew ultimately nixed both bids and decided to go it alone-until now.
In its announcement, CommScope said it will pay $15 per share, a 13% premium over Andrew’s average closing share price for the past 30 days and substantially more than the company had been willing to pay for Andrew last year. Andrew’s stock has steadily risen from around $9 per share in mid-2006 to more than $14 now.
Investors responded to the news by sending Andrew’s stock up nearly 12% in early trading. CommScope’s stock was down slightly on the news to $54.66 per share.
There is one caveat to the deal, however: Last year Andrew paid ADC $10 million to terminate their merger agreement. The company also agreed to fork over an additional $65 million to ADC if it merged with another company within the following 12 months.
Andrew’s new deal with CommScope comes 10 months after Andrew killed its deal with ADC, but the transaction is not expected to close until late 2007, so Andrew and CommScope are likely to avoid the additional charge.
“We don’t think it’s going to be an issue, but it’s something that CommScope will be addressing down the road,” said Andrew spokesman Rick Aspan.
Both CommScope and Andrew supply infrastructure equipment to telecom companies, including wireless carriers.