ADC to buy wireless gear maker Andrew Corp. for $2 billion

ADC this week said it will acquire and Andrew Corp. in a $2 billion stock deal.

The combined company will meld ADC's wireline products with Andrew's wireless infrastructure portfolio to create a $3.3 billion company addressing next-generation broadband, video, data and voice opportunities. The transaction was approved by the boards of directors of both companies, but remains subject to shareholder and regulatory approvals.

The combined company will offer equipment for carriers and enterprises spanning copper, coaxial, fiber, radio frequency, antennas, cable products, base station subsystems, in-building and distributed coverage, geolocation systems and satellite communications. It will do business in more than 140 countries; 23% of its business will be with wireline customers, 44% with wireless customers, 6% with enterprise customers, 24% with original equipment manufacturers and 3% with other customers.

The combined customer base would include nearly all major wireline and wireless service providers in the world, as well as many of the world's largest communications OEMs, and large corporate, government and education enterprises. It will employ 20,000.

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ADC this week said it will acquire and Andrew Corp. in a $2 billion stock deal.

The combined company will meld ADC's wireline products with Andrew's wireless infrastructure portfolio to create a $3.3 billion company addressing next-generation broadband, video, data and voice opportunities. The transaction was approved by the boards of directors of both companies, but remains subject to shareholder and regulatory approvals.

The combined company will offer equipment for carriers and enterprises spanning copper, coaxial, fiber, radio frequency, antennas, cable products, base station subsystems, in-building and distributed coverage, geolocation systems and satellite communications. It will do business in more than 140 countries; 23% of its business will be with wireline customers, 44% with wireless customers, 6% with enterprise customers, 24% with original equipment manufacturers and 3% with other customers.

The combined customer base would include nearly all major wireline and wireless service providers in the world, as well as many of the world's largest communications OEMs, and large corporate, government and education enterprises. It will employ 20,000.

ADC and Andrew have estimated that synergies will generate additional annual pre-tax earnings of $70 million to $80 million in the third year after closing the transaction, which is expected in four to six months.

The deal is structured as a stock-for-stock merger with Andrew becoming a wholly owned subsidiary of ADC. Andrew shareholders will receive 0.57 of an ADC common share for each common share of Andrew they hold. Upon completion of the transaction, ADC shareholders will own approximately 56% of the combined company and Andrew shareholders will own approximately 44%.

ADC's shares closed Tuesday at $22.38 while Andrew's closed at $9.78. The deal values Andrew shares at $12.76 and, with 160 million shares outstanding, ADC is paying roughly $2 billion for the company.

The combined company will be based at ADC's world headquarters in Minnesota with ADC's John Blanchard continuing as non-executive chairman, and ADC's Robert Switz continuing as its president and CEO. The board of directors of the combined company will be composed of 12 members, of which eight will be current ADC directors, including Blanchard and Switz, and four will be current Andrew directors. Key members of the management teams from both companies will comprise the management team of the combined company after closing. The name of the combined company will be ADC Andrew.