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COMM Completes Strategic Divestiture for Core Focus: Stock to Gain?
COMMCommScope(COMM) ZACKS·2025-02-04 15:36

Core Viewpoint - CommScope Holding Company, Inc. has completed the divestiture of its Outdoor Wireless Networks (OWN) and Distributed Antenna Systems (DAS) businesses to Amphenol Corporation for approximately 2.1billion,allowingthecompanytofocusonitscoreoperationsandimprovefinancialstability[1][2][4].FinancialImpact−ThedivestitureproceedswillbeusedtofullyrepayoutstandingamountsunderCommScope′sasset−backedrevolvingcreditfacilityandtorepayseniorsecurednotesduein2026andpartiallyforthoseduein2029[3].−AsofSeptember30,2024,CommScopehad2.1 billion, allowing the company to focus on its core operations and improve financial stability [1][2][4]. Financial Impact - The divestiture proceeds will be used to fully repay outstanding amounts under CommScope's asset-backed revolving credit facility and to repay senior secured notes due in 2026 and partially for those due in 2029 [3]. - As of September 30, 2024, CommScope had 392.1 million in cash and cash equivalents against 8billioninlong−termdebt,resultinginadebt−to−capitalratioof155.88 billion in long-term debt, resulting in a debt-to-capital ratio of 155.8% [5][6]. Strategic Focus - The divestiture is part of a broader strategy to enhance operational efficiency and prioritize core businesses, following the earlier divestiture of the Home Networks business to Vantiva [4]. - The acquired businesses are projected to generate around 1.3 billion in net sales in fiscal 2025, indicating a strong potential for Amphenol [2]. Stock Performance - CommScope's shares have increased by 139.2% over the past year, significantly outperforming the industry growth of 45.2% [7].