JOHANNESBURG (02/05/2004) - CommScope Inc. announced Thursday that it has completed the acquisition of the Connectivity Solutions business of Avaya Inc. (ASC), except for certain international operations whose acquisition is expected to be completed later this year.
The acquisition was effective January 31, 2004.
Says Frank M. Drendel, CommScope chairman and CEO: "We believe that this combination creates significant opportunities for synergy and innovation, and will provide value to both customers and business partners.
"Systimax Solutions, the new enterprise connectivity company, is already recognised in its field," Drendel adds. "We intend to build on this by bringing complementary technologies and renewed commitment to its business. We are also proud to announce the new CommScope Carrier Solutions group that will provide cabinets, cable and apparatus solutions to telecommunications service providers."
The total consideration for the ACS business was adjusted to reflect a higher cash payment, fewer shares of CommScope common stock and a lower level of assumed liabilities by CommScope than previously announced.
The total purchase price consists of US$250 million in cash, subject to post-closing adjustments, and approximately 1,8m shares of CommScope common stock. At the time that the agreement between CommScope and Avaya was announced on October 27, 2003, those shares were valued at $22.9 million, and, at the close of business on January 30, they were valued at $32.8 million. In addition, CommScope will assume up to $65 million of specified liabilities, primarily related to employee benefits.
The cash portion of the purchase price consists of $150 million from CommScope's existing cash balances, and $100 million from borrowing under a new 5-year $185 million senior secured credit facility.
The new credit facility, which replaces CommScope's previous credit facility, consists of a $75 million term loan and a $110 million revolving credit facility, and was underwritten and arranged by Wachovia Securities. CommScope had approximately $206 million in cash and cash equivalents on its balance sheet as of December 31, 2003. The company plans to release fourth quarter 2003 results on February 19.