CommScope Completes ‘Once- In-A-Lifetime’ Arris-Ruckus Acquisition

CommScope is now poised to attack the 5G, mobility and Internet of Things market by completing Thursday its $7.4 billion acquisition of communications and networking specialist Arris International, which owns Ruckus.

“We are creating a new CommScope that will help shape communications connectivity and networks of the future with greater technology, solutions and employee talent,” said Eddie Edwards, CommScope’s president and CEO, in a statement. “We are focused on ensuring CommScope, with the fully integrated Arris and Ruckus businesses, is at its best financially, operationally and competitively.”

CommScope’s stock is up nearly 4 percent to $24.73 as of Thursday morning with a market cap of $4.72 billion.

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The Hickory, N.C.-based network infrastructure provider said it is expanding its total addressable market to more than $60 billion with the acquisition, which it expects to generate nearly $1 billion in cash flow in its first full year with Arris. Suwanee, Ga.-based Arris sells a variety of broadband, cloud, networking, video and wireless offerings and services.

Arris’ former CEO, Bruce McClelland, will become chief operating officer at CommScope.

“This is a once-in-a-lifetime combination of two great companies that are poised to make a lasting impact on the communications industry and the customers we serve,” said McClelland in a statement. “Together, we combine great employee talent and experience, an impressive record of innovation and industry firsts, and a sharp focus on creating a world-class customer experience.”

CommScope said it will expand its product offerings and R&D capabilities as a combined company and will now have approximately $800 million in average annualized R&D spending.

CommScope unveiled its intent to buy Arris in November in an all-cash transaction worth $31.75 per share, or approximately $7.4 billion, including the repayment of debt.

Private equity firm The Carlyle Group also re-established its ownership position in CommScope and committed to a $1 billion minority investment that CommScope will use to finance the deal. After buying CommScope in 2011, the firm took the company public in 2013 and sold off its remaining shares in 2016.

“This is a major milestone in the evolution of these two great companies and a significant moment for our industry,” said Edwards.