Vantiva Acquires CommScope’s Home Networks Division
Paris-based Vantiva, which was formerly known as Technicolor (they make a lot of budget broadband routers for ISPs), has today announced the completion of their acquisition of CommScope‘s Home Networks business. CommScope also supplies network technologies to internet and full fibre operators in the UK and elsewhere.
The union of these two big players in the connected home market will no doubt enable Vantiva to enhance its global influence and impact (particularly in terms of CPE / Customer Premises Equipment), while also boosting the group’s profitability, capacity and broadening its client portfolio.
Vantiva’s acquisition of CommScope’s Home Networks division was remunerated by a 25% stake in Vantiva’s fully-diluted capital from the reserved capital increase authorized by the Combined General Meeting of December 19, 2023.
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Additionally, CommScope could receive an earn-out payment of up to $100 million, subject to Vantiva (at post-acquisition scope) achieving an EBITDA equal to or greater than 400 million euros in a given fiscal year, within the 5 years following the first fiscal year after the conclusion of the acquisition.
Luis Martinez-Amago, CEO of Vantiva, said:
“This acquisition is a key milestone in the group’s development. It builds on everything we have achieved over the past year. I would like to thank all our employees for their commitment and dedication, and I welcome our new colleagues from CommScope, whom we look forward to working with. The integration of the Home Networks division will also benefit our customers by speeding up our innovations, increasing our supply and service capacity, and enabling us to serve new geographies.”
Vantiva has also announced new appointments to the company’s Board of Directors: CommScope Holding Company, Inc. as Director, represented by Krista Bowen, and Angelo, Gordon & Co. L.P. as Director.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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For those who have any interest in such matters, Commscope’s Home Networks business included the Arris CPE products (not the Arris networks products). Arris for many years made cable modems for Liberty Global and Virgin Media amongst others, and also made ONTs and xDSL and XGS hubs, again mostly for ISPs I believe.
Commscope’s Home Networks business doesn’t appear to have made a net profit in any of the past five years since the Arris acquisition, and they’re selling it because they’ve failed to make it profitable in the past five years. Vantiva themselves have seen their market capitalisation fall by a staggering 98% over the past five years, with persistent sizeable losses, so the 25% equity stake in the merged company isn’t worth very much at all (perhaps Eur 25m). All of which says that investors have a very different and not terribly positive view of the outlook for either of the businesses merging here.
The combined operations have turnover of about Eur 4bn, so not a small operation, and lots of money coming in. Which begs the question, given the dismal performance of both businesses for the past five years, why do management think they’ve got what it takes to merge these businesses and turn round the performance?