About Commscope Connectivity Solutions LLC

CommScope doesn't need to be coaxed into making cables. Its CommScope Connectivity Solutions segment makes coaxial cabling, fiber optic cable, and connectivity systems for data centers, central offices, and cable television facilities. It also maintains and supplies a portfolio of fiber optic connectors and fiber management systems. The company's other segment, CommScope Mobility Solutions, makes merchant RF (radio frequency) wireless network equipment, DAS (distributed antenna systems), and macro cell site systems used in wireless tower sites and on rooftops. (A macrocell is a cell in a mobile phone network that provides radio coverage powered by a tower or antenna.) CommScope was established in 1976.

Operations

CommScope operates through two segments: CommScope Connectivity Solutions (CCS) and CommScope Mobility Solutions (CMS).

CCS is the largest segment, accounting for 60% of total revenue, and provides connectivity and network intelligence for indoor and outdoor network applications. Products include coaxial cabling, fiber optic cable, and connectivity systems, including fiber optic connectors and fiber management systems. These are sold under the SYSTIMAX, AMP NETCONNECT, and Uniprise brands.

CMS provides merchant RF (radio frequency) wireless network products and services, as well as metro cell, DAS (distributed antenna systems), and macro and small cell systems. Its macro cell site components (representing three-quarters of CMS segment sales) include base station antennas, microwave antennas, connectors, and filters. Most of the products within its CMS portfolio are marketed under the Andrew brand.

Geographic Reach

CommScope serves customers in more than 100 countries through more than 30 manufacturing and distribution facilities located in Australia, Belgium, China, Czech Republic, Germany, India, Ireland, Mexico, and the US. The US is its largest market, accounting for about 55% of net sales. The Asia Pacific and Europe, Middle East and Africa (EMEA) regions each account for nearly 20%.

Sales and Marketing

CommScope's main customers include telecommunication operators, enterprise customers, and multi-system operators (MSOs), served through a direct sales force and a global network of channel partners. Anixter International is its largest distributor, accounting for about 10% of net sales.

CCS segment products are primarily sold through independent distributors or system integrators. It also sells directly to cable television system operators, broadband operators, or service providers that deploy broadband networks. CMS segment products are mainly sold directly to wireless operators, OEMs that sell equipment to wireless operators, or other service providers.

Financial Performance

CommScope's revenues surged 29% from $3.8 billion in 2015 to $4.92 billion in 2016, its highest total in at least 10 years. This was driven by an additional $1.24 billion in revenue attributed to its previous purchase of TE Connectivity's Broadband Network Solutions (BNS) business. This transaction also caused its CCS segment's sales to climb by more than 60% during 2016. However, excluding these incremental net sales related to the acquisition, CCS segment sales decreased by 6% due to lower sales in international markets.

After posting a net loss of $71 million during 2015 mostly due to expenses associated with previous acquisitions, CommScope generated net income of $223 million in 2016. This was mainly the result of the historic revenues coupled with about $50 million less it paid in asset impairment charges compared to the previous year.

CommScope's operating cash flow more than doubled from $302 million in 2015 to $606 million in 2016. This was fueled by the higher adjusted operating income, favorable payment terms with vendors in 2016, the impact of lower cash compensation payments, and lower payments of integration and transaction costs compared to the previous year.

Strategy

CommScope is focused on growing its fiber and wireless capabilities as more customers and businesses demand faster telecommunications systems. It is using acquisitions to enhance its position in this important market and is focused on recognizing synergies from the acquisitions it has previously made. During 2016, it established a new organizational structure, streamlined manufacturing and distribution facilities, and completed the North American phase of system integrations. Moving forward, it will focus on optimizing and integrating its international organizational structure to achieve a similar stage of growth.

Mergers and Acquisitions

CommScope has been enhancing its product portfolio (mainly its CCS segment) through the use of acquisitions. In mid-2017 it purchased California-based Cable Exchange, a maker of fiber optic, copper cables, and related products operating from two manufacturing centers located in Santa Ana, California, and Pineville, North Carolina. CommScope made the acquisition to beef up its fiber optics infrastructure as it caters to high-capacity data centers.

CommScope in 2015 acquired the Broadband Network Solutions (BNS) business of TE Connectivity for $3 billion. (The BNS business consisted of TE Connectivity's telecom, enterprise, and wireless operations.) With the deal, CommScope gained a more diverse geographic and type of business mix of customers while complementing its current business. It also posted historic revenue totals for 2016 as a result of the transaction.

Also in 2015, CommScope picked up Airvana, a provider of small cell technology for wireless networks. The company paid $44 million for Airvana in a deal that enhanced its Wireless segment.

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Commscope Connectivity Solutions LLC

1100 Commscope Pl Se
Hickory, NC 28602-3619
Phone: 1 (828) 324-2200

Stats

  • Employer Type: Public
  • Pres Software Sys Bus Units: Jo A Anderson
  • Merger & Acquisition Dir: Jeff Liter
  • Pres Network Solt'ns Buss Unit: Richard B Parran
  • Employees: 9,000

Major Office Locations

  • Hickory, NC

Other Locations

  • Marietta, GA
  • Hopkins, MN
  • Greensboro, NC
  • Waxhaw, NC
  • Sidney, NE
  • Santa Teresa, NM
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