In the biggest acquisition in company history, Hickory-based cable maker CommScope is buying a Georgia telecommunications equipment manufacturer called Arris International for $7.4 billion.
The combined company’s headquarters will remain in Hickory, where CommScope employs over 230 people, spokesman Joe Depa said. The merged company will maintain “a significant presence” in Suwanee, Ga., where Arris has its headquarters, according to a statement from CommScope Thursday morning.
CommScope’s shares closed at $19.56 Thursday, down over 20 percent.
“Hickory remains the global headquarters, but of a much larger and strategically important company,” Depa said. “That’s good for CommScope and good for this area. We are excited about the long-term potential of the combination and the benefits it can bring to our customers and employees.”
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In the statement, CommScope, which went public in 2013, said that acquiring Arris will position the combined companies to benefit from “key industry trends,” including 5G wireless service and the growth of fiber and mobility.
Arris makes equipment for the wireless industry, such as modems, cable boxes and DVRs. According to the AP, equipment makers and telecommunications companies like Verizon are working to prepare for 5G, which is expected to allow for faster data transmission and better connectivity between multiple devices.
CommScope has been investing in wireless infrastructure and services over the years. The company, for instance, worked with the Carolina Panthers to provide the equipment and the technical support for Bank of America Stadium’s wireless network in 2015.
“CommScope and Arris will bring together a unique set of complementary assets and capabilities that enable end-to-end wired and wireless communications infrastructure solutions that neither company could otherwise achieve on its own,” said CommScope CEO Eddie Edwards, who will remain CEO of the merged company.
To finance the deal, The Carlyle Group, a former CommScope owner, has reestablished a $1 billion investment in CommScope, giving the investment firm a minority ownership position in the local company.
The deal is expected to close in the first half of 2019, CommScope said. By the end of the first full year after the deal’s closing, merging with Arris is expected to be more than 30 percent accretive, meaning it will add that much value, to CommScope’s adjusted earnings per share, CommScope said.
CommScope said combining with Arris will create a company with approximately $11.3 billion in annual revenue.