Vantiva to acquire CommScope’s STB and gateway business
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John Moulding
| 04 October 2023
2 Vantiva to acquire CommScope s STB and gateway business

Vantiva (formerly Technicolor) is going to acquire the CommScope Home Networks Business, marking a significant consolidation in the customer premise equipment market. The deal covers STBs, modems, gateways, smart media devices and 1,400 people.

The deal delivers on Vantiva’s previously stated objective to reinforce leadership in its core business. Vantiva says the deal will significantly scale up its connected home capabilities, increase its footprint in key geographies, give the company a broader customer base and provide access to new market segments. The deal also gives Vantiva an enhanced ability to innovate and supports its existing diversification strategy, the company stated.

“There is minimal overlap between the two companies in what is historically a sticky market (from a customer perspective),” Vantiva pointed out. Vantiva will gain eight Tier-1 customers and 40+ other significant customers when the agreement closes, which is scheduled for Q4 2023.

“This is a business of scale, and when you get scale, you have many other advantages that come with that,” Luis Martinez-Amago, CEO of Vantiva, said.

In FY22, video devices made up 38% of sales for CommScope Home Networks Business, with broadband devices accounting for 53% of sales, retail devices adding 4% and software services covering 4%. In terms of geography, 59% of CommScope Home Networks Business sales came from North America, with 25% from EMEA. CommScope has delivered over 300 million connected home devices worldwide.

On an investor call, Martinez-Amago said: “When we created Vantiva we were determined to bring this company to a different place, and one key aspect of that was to reinforce and regain leadership in our core business, which is CPE. The CommScope Home Networks Business is equivalent to our Connected Home Division, and the deal is a major step on our roadmap moving forwards.”

The transaction is expected to generate more than €100 million in pre-tax net synergies from FY26, primarily from cost optimisation initiatives and operational efficiencies.

CommScope first announced its intent to separate its Home Networks Business in April 2021 as part of its CommScope NEXT initiative to drive portfolio optimisation. After assessing various strategic alternatives for the Home Networks business, CommScope has now determined that Vantiva is the best partner for this business.

Under the terms of the transaction, CommScope will receive a 25% stake in Vantiva plus an earnout of up to $100 million (contingent upon Vantiva achieving EBITDA equal to or exceeding €400M in a given year over a 5-year period and meeting certain other thresholds.) CommScope will also have one representative on Vantiva’s Board of Directors.

“For the past two years, we have methodically and thoughtfully considered the strategic alternatives for our Home Networks business which would provide the highest value for our shareholders and the best partner to support our customers. In Vantiva, we are confident that we have found the right buyer,” states Chuck Treadway, CEO of CommScope.

“Our Home Networks business is currently in a challenging environment, and by combining these two businesses we believe it provides the best opportunity for future success. Additionally, both Home Networks and Vantiva share a similar vision, and value innovation, customer service, and developing products of the highest quality.

“We see compelling financial and commercial reasons for the combination of these two businesses at this time, and we are excited about the future opportunities for our employees, customers and partners around the world.”

Martinez-Amago adds: “This planned strategic acquisition represents a unique transformative opportunity for Vantiva. 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.”