CommScope (NYSE: CTV) announced today that it has signed a definitive
agreement to acquire Alcatel's coaxial cable business in Seneffe,
Belgium. The purchase price will be finalized at the time of the closing
and is expected to be in the $20 to $25 million range. CommScope will
also supply Alcatel with its future worldwide requirements of CATV
coaxial cable for a period of time to be determined. The acquisition
gives CommScope access to established European distribution channels and
complementary coaxial cable technologies.
"The Seneffe coaxial cable business is a natural strategic fit," said
Frank M. Drendel, Chairman and CEO of CommScope. "Alcatel's Seneffe
business has recognized technical expertise and strong manufacturing
capabilities. The addition of the Seneffe business to CommScope is
expected to benefit customers in Europe and around the world. We are
also pleased to enhance our ongoing supply partnership with Alcatel for
coaxial cable products.
"We believe that international markets offer outstanding long-term
opportunities. The proposed AT&T/TCI merger reaffirms our view that
Hybrid Fiber Coaxial (HFC) networks will be a leading worldwide
architecture for video, voice and high-speed Internet access. We have
been working to strengthen our worldwide delivery capability and access
to markets because we believe in HFC.
"This combination is about growth and improved access to key strategic
markets. We look forward to enthusiastically welcoming the Seneffe
employees, as they will play a critical role in providing global support
and extending our portfolio of broadband cable products.
"Financially, this acquisition creates the opportunity for growth in
sales, cash flow and shareholder value over the long-term. While we
expect the transaction to be neutral to slightly negative to 1999
earnings, we expect it to be accretive thereafter. This acquisition is
financially and strategically sound," Drendel added.
The Seneffe operation is the largest CATV coaxial cable manufacturer in
Europe with annual sales of approximately $35 million. The 120,000
square foot facility has some 120 permanent employees.
The transaction is subject to certain contingencies including regulatory
approval and is expected to be completed by the end of the year.
CommScope is the world's largest manufacturer of coaxial cable and is a
leading supplier of high-performance telecommunications cable for LAN
and other applications.
Alcatel is a world leader in telecommunications systems and equipment.
It provides complete solutions and services ranging from backbone
networks to user terminals for operators, service providers, enterprises
and customers. Alcatel Cable is the worldwide leader in overall telecom
and power cable markets.
Statements in this press release which are other than historical facts
are intended to be "forward-looking statements" within the meaning of
the Securities Exchange Act of 1934, the Private Securities Litigation
Reform Act of 1995 and other related laws, and include, but are not
limited to, those statements relating to CommScope's relative market
position, effects of establishing European operations, sales, margins,
and earnings. While CommScope believes such statements are reasonable,
the actual results and effects could differ materially from those
currently anticipated. Factors and risks that could cause such
differences include, but are not limited to the failure to complete the
Alcatel transaction or to operate the European facility successfully,
developments in technology, pricing and acceptance of CommScope's
products, changes in raw material costs, industry competition,
international economic conditions, cable television industry capital
spending, the proposed AT&T/TCI merger and other factors. The cautionary
statements contained in CommScope's Form 10-Q for the quarter ended June
30, 1998 are incorporated herein by reference.
Visit CommScope at our Web Site -- www.commscope.com
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: Statements in this press release regarding CommScope's
business which are not historical facts are "forward-looking statements"
that involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see "Risk Factors" in the
Company's Annual Report or Form 10-K for the most recently ended fiscal