Commscope Up 30% On Takeover Prospects

By David Gross

Cabling manufacturer Commscope (CTV) said today that it is in talks to be taken private by The Carlyle Group.  News of the potential deal, which would be worth $3 billion, sent Commscope's shares soaring 30% today, to a close of just over $30 a share, and a $2.9 billion market cap.

Along with Siemon, Panduit, Belden (BDC), Berk-Tek, Tyco Electronics (TEL), Amphenol (APH), and Corning (GLW), Commscope is among a group of vendors that supply data centers with fiber optic and copper cabling.   Most of these companies sell into multiple industries, so they do not depend on data centers typically to the same extent that traditional IT and networking manufacturers do.   In Commscope's case, its 2007 acquisition of Andrew gave it a large presence in the wireless market, and it has long been the leading supplier of coaxial cable to the Cable TV industry.   The company was hit hard by the recession, and saw revenue fall 25% in 2009, allthough it has begun to rebound with last quarter's revenue of $838 million representing a year-over-year increase of 7%.

While there are number of silicon photonics and Active Optical Cabling manufacturers who could go public over the next years, it is very difficult for public market investors to take advantage of the growth in data center cabling.