- Debt-ridden CommScope is selling off its outdoors networks business
- Amphenol will buy the outdoor 5G and DAS business for $2.1 billion in cash
- AT&T, T-Mobile and Verizon have been among the customers of the outdoor network group
CommScope is selling off its Outdoor Wireless Network and distributed antenna system (DAS) for $2.1 billion in cash to Amphenol Corporation, as the outdoor businesses contend with lower customer demand.
Amphenol will pay cash for the CommScope business. The deal is anticipated to close in the first half of 2025, subject to regulatory approval.
“The OWN (Outdoor Wireless Network) segment's antennas and site solutions have been used in some 5G rollouts,” Asad Khan, Research Director of 5G at SNS Telecom and IT told Fierce in an email. “However, the segment has been struggling due to high customer inventories and lower demand,” the analyst added.
“Vodafone Group, AT&T, Verizon and T-Mobile U.S. are among the OWN segment's largest mobile operator customers,” Khan noted.
With the lower customer demand, the OWN sale could be seen as another fallout from the decline of 5G radio infrastructure business in the second half of 2023 and into 2024.
The OWN sector represented 15.9% of CommScope’s business, according to the company’s own latest available figures, and is the third largest segment in the company’s portfolio in 2022. “Our view is that once the divestment of both the OWN and DAS business units is concluded in 2025, the company will service indoor deployments with its portfolio of multi-operator small cells,” Khan told us.
“Sure, USD $2.1 billion is likely less than what CommScope probably wanted to see OWN/DAS for but they should be happy Amphenol stepped up to pay and not wait until a bankruptcy/stalking horse situation where the valuation would even be lower than the 7x EV/EBITDA valuation they got,” Earl Lum, president of EJL Wireless said on LinkedIn, while describing the Amphenol move as “strategic.”
CommScope (COMM:NASDAQ) stock is trading down 1.11% at $1.73 at the time of publication.