CommScope to spin-off its Home Networks business to cut costs

CommScope Holding Company plans to spin-off its Home Networks business to reduce its operating costs.
CommScope China
The proposed separation of CommScope’s Home Networks business and operating expense reduction represent early steps in the company’s CommScope NEXT strategy to optimize the business portfolio, drive above-market growth, and control costs.

“We expect the cost reduction actions we are taking in core CommScope to offset Home Networks’ adjusted EBITDA and create savings we can reinvest in our business, which should result in post-spin leverage within core CommScope at no more than current levels,” CommScope CEO Chuck Treadway said.

CommScope will be composed of the following three business segments:

Broadband Networks: Dedicated to serving the telco and cable provider broadband market as an equipment manufacturer. The segment is focused on growing its current portfolio and deployment of DAA and virtualized platforms and driving investments to expand fiber capacity, fiber connectivity and network orchestration.

Venue and Campus Networks: Targeting both public and private networks for campuses, venues, data centers, and buildings. Venue and Campus Networks is focused on driving performance in its RUCKUS Wi-Fi 6 and cloud control platforms, ONECELL features to capitalize on 5G growth and virtualization, and driving high-density expansion in data centers.

Outdoor Wireless Networks: Focused on the Macro and Metro Cell businesses and building metro cell power solutions and modularity design innovation. The segment is also working on the development of new technologies in cell site connectivity and other technologies to support telco carriers building their 4G and 5G networks.

Home Networks

Joe Chow, Home Networks senior vice president, will become the chief executive officer of the stand-alone Home Networks company. The new, independent company is expected to be listed on the NASDAQ stock exchange upon completion of the separation.

CommScope currently expects the transaction will be completed by the end of the first quarter of 2022, subject to market, regulatory and certain other conditions, including final approval of CommScope’s Board of Directors.