CommScope doesn't need to be coaxed into making cable. Through three key customer segments, the company makes coaxial, fiber-optic, and other cable products for data, voice, and video transmission including high-bandwidth cable that provides telephone, cable TV, and Internet access. Segments include Broadband and Wireless; in addition, its Enterprise operations make network infrastructure products including cabinets, antennas, software, and network design services. Customers include telecommunications service providers and OEMs, including Anixter, Alcatel-Lucent, and Comcast. Private equity powerhouse The Carlyle Group took CommScope private in 2011 for $3.9 billion. It went public again in 2013.
CommScope in 2013 went public and used its $576 million in proceeds to pay down debt and for general corporate purposes.
The company's products are sold in more than 100 countries. It has production facilities in the Australia, Brazil, China, Czech Republic, Germany, India, Ireland, Mexico, the UK, and the US (North Carolina, Illinois, Nevada, and Texas).
Its Wireless division has been expanding its Suzhou, China, manufacturing and distribution center to serve local customers. The wireless telecommunications market is growing in this region and the company's Andrew brand is the only non-Chinese cable and antenna supplier that is approved by state-run China Telecom. To meet demand, Andrew has been continually expanding its manufacturing operations in all its China locations.
CommScope's Wireless division (RF networks and small cell distributed antenna systems primarily under the Andrew brand) contributes more than 60% of total sales. Enterprise, which includes SYSTIMAX and Uniprise branded fiber, cables, software, hardware, sensors, lighting, and control systems for data centers and commercial buildings, accounts for nearly 25%. The Broadband division's multichannel video, voice, and high-speed data coaxial and fiber optic cable operations bring in the final 15% of sales.
Commscope's revenues increased by 10% to $3.8 billion in 2014, its highest total in seven years. The growth was due to higher sales to domestic wireless operators within its Wireless segment as they continued to expand 4G coverage and capacity. Wireless also experienced growth in the Asia Pacific (APAC) region and Europe, Middle East and Africa (EMEA) regions.
In addition, its Enterprise segment increased by 3% in 2014, resulting from higher sales within the APAC and US regions, and its Broadband segment spiked 5% resulting from higher domestic sales.
Commscope's net income skyrocketed from $19 million in 2013 to $237 million in 2014. The seismic growth was fueled by the increased revenues, along with lower expenses from asset impairments, related to the assets of its Broadband and Wireless segments.
Mergers and Acquisitions
CommScope in early 2015 agreed to acquire the telecom, enterprise, and wireless business of TE Connectivity for $3 billion. With the deal, CommScope will have a more diverse geographic and type of business mix of customers while complementing its current business.
In 2013 CommScope purchased Redwood Systems, a producer of lighting and sensor networks for data centers and other buildings. The company's platform can be deployed through CommScope's existing cabling infrastructure to integrate IT and building systems. In the same vein, it also picked up the assets of data center infrastructure management company iTRACS.
Leading up to the acquisition, the company faced industry competition, recognizing that it had a limited number of core customers, distributors, and suppliers. The company put itself at risk by relying on contract electronics manufacturers to make its products. These factors, compounded by the global recession and credit crisis, caused CommScope to spiral downward. The company responded by consolidating and reorganizing its operations in an effort to trim costs and regain its financial footing.