CommScope won’t ‘sell assets on the cheap’

CommScope is continuing to evaluate alternatives, including asset sales, to help reduce the company’s $9 billion debt load. But execs said divesture discussions have yet to bear fruit, and stressed that CommScope won’t resort to a fire sale.

“We do not intend to sell assets on the cheap,” CommScope EVP and CFO Kyle Lorentzen said Thursday on the company’s Q4 2023 earnings call.

Divestiture discussions continue, but “we have not thus far been successful in achieving valuations that make sense to us,” Lorentzen added.

Industry sources confirmed a Bloomberg report last fall that CommScope was exploring a sale of certain assets, including Ruckus Wireless and its access networks solution (ANS) unit. Last fall, a person familiar with the situation said individual investors/entrepreneurs with cable tech background were interested in pursuing CommScope’s ANS assets and launching a new company of cable industry vets to run it.

At the time, CommScope said it was looking to “optimize” its portfolio as part of an initiative launched in 2021 aimed at evaluating the company’s assets, but did not elaborate on which pieces of the business are under consideration. CommScope recently sold off Home Networks, a unit that makes set-tops and cable modems and gateways, to Vantiva after deciding not to push ahead with an original plan to spin off Home Networks into a separate, publicly traded company.

CommScope’s ANS unit makes and sells various access network products, including amplifiers, nodes, remote optical line terminals (OLTs), cable modem termination systems (CMTSs), as well as a new virtual CMTS that is now in trials with multiple “major” operators. CommScope has developed a Full Duplex (FDX) amplifier that will play a starring role in Comcast’s DOCSIS 4.0 network upgrades.

CommScope expects the company’s FDX product line to see “significant shipments in the second half of this year,” Treadway said.

Ruckus is a Wi-Fi and wireless network specialist that’s part of CommScope’s Networking, Intelligent Cellular and Security Solutions (NICS) division.

Tough Q4 and first half of 2024, hopes for a recovery in second half

CommScope’s Q4 2023 results and 2024 outlook followed a similar theme among tech suppliers. Sales are expected to remain soft through the first half of 2024 as customers pare down inventories alongside optimism that the picture will improve in the second half of 2024.

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