Vantiva, formerly known as Technicolor, has entered into an agreement to buy CommScope’s Home Networks division in exchange for a 25% stake in Vantiva.
The planned acquisition would significantly increase Vantiva’s Connected Home capabilities. In the last 12 months ending June 2023, CommScope Home Networks and Vantiva’s Connected Home generated $[1.5] billion and €[2.0] billion in sales, respectively.
Commenting on the transaction, Luis Martinez-Amago, CEO of Vantiva, said: “This planned strategic acquisition represents a unique transformative opportunity for Vantiva.
“It will enable us to reinforce Vantiva’s Connected Home operations, accelerate our innovation roadmap and expand into new markets through additional commercial partnerships. From a financial perspective, the acquisition of Home Networks will substantially increase the scale of our business while also generating synergies, which will significantly strengthen our free cash flow generation potential. This will result in a value-enhancing transaction benefiting all stakeholders, including end-consumers, customers, employees, shareholders and lenders. Subject to various approvals, we will be thrilled to welcome CommScope as a shareholder in Vantiva and our new colleagues joining us from CommScope Home Networks”.
Aside from a 25% stake in Vantiva, CommScope would receive a maximum cumulative earnout of $100 million in cash contingent upon Vantiva (at constant scope) achieving an EBITDA equal or exceeding €400 million in a given fiscal year over the five years following the first full year after closing. Maximum payment in a year would be $50 million.
Chuck Treadway, CEO of CommScope, added: “We are excited about the strategic opportunity to sell our Home Network business to Vantiva and become a key reference shareholder in Vantiva.
“The combination of the two entities will create value for customers and other stakeholders and we look forward to supporting Luis and the rest of the Vantiva team in the execution of the combination and the potential value creation”.
Under the terms of the agreement, the acquisition is subject to Vantiva’s exercise of the call option following information and consultation processes with relevant employee representative bodies, which will be initiated as soon as possible.
The transaction, which would be expected to be completed in late Q4 2023, would also be subject to the receipt of regulatory approvals and customary closing conditions.