Car­lyle Group to rein­vest in Com­mS­cope to help fund buy­out

Firm agrees to buy Ar­ris In­ter­na­tional for $4.93B

The Standard (St. Catharines) - - Business - KIM­BERLY CHIN

Car­lyle Group is rein­vest­ing in Com­mS­cope Hold­ing Co. to help the net­work in­fra­struc­ture firm ex­pand its wired and wire­less com­mu­ni­ca­tion net­works.

Com­mS­cope said Thurs­day it has agreed to buy telecom­mu­ni­ca­tions equip­ment maker Ar­ris In­ter­na­tional PLC in an all-cash deal val­ued at about $4.93 bil­lion.

The com­pany, which has also agreed to re­pay Ar­ris’s debt, said Ar­ris share­hold­ers will re­ceive $31.75 a share.

Com­mS­cope plans to fi­nance the deal in part through a $1 bil­lion in­vest­ment from Car­lyle Group. The pri­vate-eq­uity firm bought Com­mS­cope in 2011, took it pub­lic in 2013 and sold off its re­main­ing shares in 2016.

This lat­est in­vest­ment gives Car­lyle a 16% stake in Com­mS­cope, the com­pany said.

The re­main­der of the deal will be fi­nanced with cash on hand and fi­nanc­ing com­mit­ments from J.P. Mor­gan Se­cu­ri­ties LLC, Bank of Amer­ica Mer­rill Lynch and Deutsche Bank Se­cu­ri­ties LLC.

The Ar­ris deal is ex­pected to close in the first half of next year. Upon com­ple­tion, Com­mS­cope’s Ed­die Ed­wards will re­main pres­i­dent and chief ex­ec­u­tive, and Ar­ris CEO Bruce McClel­land will join the com­bined com­pany. The com­bined com­pany is ex­pected to have sales of about $11.3 bil­lion, based on fi­nan­cial re­sults for the two com­pa­nies for the 12 months ended Sept. 30. Ar­ris had $6.7 bil­lion in rev­enue over that pe­riod.

On Thurs­day, Com­mS­cope also posted third-quar­ter earn­ings. The com­pany said profit rose 25% to $63.8 mil­lion and sales climbed 2% to $1.15 bil­lion. On an ad­justed ba­sis, the com­pany earned 59 cents a share. An­a­lysts were ex­pect­ing ad­justed per-share earn­ings of 66 cents and rev­enue of $1.22 bil­lion. Shares of Com­mS­cope fell 10% while Ar­ris’s stock rose 11% in pre­mar­ket trad­ing Thurs­day.

DREAM­STIME TNS

Com­mS­cope has agreed to re­pay firm’s debt as part of deal.

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