Secures Commitments for $3.15 Billion in New
First-Lien Term Loans and $1 Billion in First-Lien Notes
Company to Fully Repay 2025 Senior Unsecured
Notes and 2026 Secured Debt Maturities Through Proceeds from the
Refinancing Transaction and Previously Announced Asset Sales
CommScope Holding Company, Inc. (NASDAQ: COMM) (“CommScope” or
the “Company”), a global leader in network connectivity solutions,
today announced the closing of a comprehensive refinancing (the
“Transaction”) with its first-lien secured lenders. The Transaction
will enable CommScope to address its upcoming 2025 and 2026 debt
maturities and position the Company for future success.
As part of the Transaction, CommScope entered into new
agreements with a group of its existing first-lien lenders,
including funds managed by Apollo and Monarch Alternative Capital
(“Monarch”), including a new $3.15 billion first-lien term loan,
maturing in 2029, and $1 billion in first-lien notes, maturing in
2031 (collectively the, “New First-Lien Debt”). Proceeds from the
New First-Lien Debt will enable the Company to fully repay its
senior unsecured notes due 2025 and its existing senior secured
term loan facility. Expected proceeds from the previously announced
sale of the Company’s Outdoor Wireless Networks (“OWN”) segment as
well as the Distributed Antenna Systems (“DAS”) business units to
Amphenol Corporation (NYSE: APH) for $2.1 billion, which is
expected to close in Q1 2025, will be used to fully repay the
Company’s senior secured notes due 2026, and provide a ratable
redemption or other repayment of a portion of the Company’s senior
secured notes due 2029.
“This transaction is a pivotal step forward in our ongoing
process to position CommScope for long-term growth,” said Chuck
Treadway, President and Chief Executive Officer of CommScope. “By
successfully addressing our near-term maturities and greatly
improving our pro forma leverage ratio, we move forward with the
flexibility to focus on our core businesses and invest in the
technology, products, and personnel to better deliver for our
customers, and capitalize as the telecom industry recovers in the
coming quarters. We will continue to explore opportunities to
leverage the significant flexibility available under our credit
agreements to further reinforce our capital structure as market
conditions evolve.”
“We are pleased to support CommScope in this strategic
transaction, working with the company and other lenders to provide
a refinancing solution that improves CommScope’s financial position
and provides long-term capital to execute on its robust business
plans,” said Apollo Partner Chris Lahoud and Monarch Portfolio
Manager Adam Sklar. “The significant size of this transaction
reflects our confidence in the CommScope leadership team and path
forward.”
Following the use of net proceeds from the closing of the OWN
and DAS asset sale, which is expected in Q1 2025, the Company
anticipates meeting the conditions for the first term loan rate
step down as part of the Transaction. The Transaction, the use of
net proceeds from the OWN and DAS business unit’s sale, and the
Company’s projected business performance is expected to drive the
Company’s total debt to Adjusted EBITDA ratio below 6.00:1.00 by
the end of 2026.
Advisors
Moelis & Company LLC is serving as financial advisor, Latham
& Watkins LLP is serving as legal counsel, and C Street
Advisory Group is serving as strategic communications advisor to
CommScope.
PJT Partners is serving as financial advisor and Gibson Dunn
& Crutcher LLP is serving as legal counsel to the lenders.
About CommScope:
CommScope (NASDAQ: COMM) is pushing the boundaries of technology
to create the world’s most advanced wired and wireless networks.
Our global team of employees, innovators and technologists empower
customers to anticipate what’s next and invent what’s possible.
Discover more at www.commscope.com.
Forward Looking Statements
This press release includes certain statements that constitute
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which reflect our
current views with respect to future events and financial
performance. These forward-looking statements are generally
identified by their use of such terms and phrases as “intend,”
“goal,” “estimate,” “expect,” “project,” “projections,” “plans,”
“potential,” “anticipate,” “should,” “could,” “designed to,”
“foreseeable future,” “believe,” “think,” “scheduled,” “outlook,”
“target,” “guidance” and similar expressions, although not all
forward-looking statements contain such terms. This list of
indicative terms and phrases is not intended to be
all-inclusive.
These forward-looking statements are subject to various risks
and uncertainties, many of which are outside our control,
including, without limitation, our dependence on customers’ capital
spending on data, communication and entertainment equipment, which
could be negatively impacted by a regional or global economic
downturn, among other factors; the potential impact of higher than
normal inflation; concentration of sales among a limited number of
customers and channel partners; risks associated with our sales
through channel partners; changes to the regulatory environment in
which we and our customers operate; changes in technology; industry
competition and the ability to retain customers through product
innovation, introduction, and marketing; changes in cost and
availability of key raw materials, components and commodities and
the potential effect on customer pricing and timing of delivery of
products to customers; risks related to our ability to implement
price increases on our products and services; risks associated with
our dependence on a limited number of key suppliers for certain raw
materials and components; risks related to the successful execution
of CommScope NEXT and other cost saving initiatives; potential
difficulties in realigning global manufacturing capacity and
capabilities among our global manufacturing facilities or those of
our contract manufacturers that may affect our ability to meet
customer demands for products; possible future restructuring
actions; the risk that our manufacturing operations, including our
contract manufacturers on which we rely, encounter capacity,
production, quality, financial or other difficulties causing
difficulty in meeting customer demands; our substantial
indebtedness, including our upcoming maturities and evaluation of
capital structure alternatives and restrictive debt covenants; our
ability to refinance existing indebtedness prior to its maturity or
incur additional indebtedness at acceptable interest rates or at
all; our ability to generate cash to service our indebtedness; the
divestiture of the Home segment and its effect on our remaining
businesses; the expected timing of the closing of the sale of the
OWN and DAS businesses (the “OWN/DAS Transaction”); the expected
benefits of the Transaction and the OWN/DAS Transaction, including
the expected financial performance of CommScope following the
Transaction and the OWN/DAS Transaction; the ability of the parties
to obtain any required regulatory approvals in connection with the
OWN/DAS Transaction and to complete the OWN/DAS Transaction
considering the various closing conditions; expenses related to the
OWN/DAS Transaction and any potential future costs; the occurrence
of any event, change or other circumstance that could give rise to
the termination of the definitive agreement governing the OWN/DAS
Transaction, or an inability to consummate the OWN/DAS Transaction
on the terms described or at all; the effect of the announcement of
the OWN/DAS Transaction on the ability of CommScope to retain and
hire key personnel and maintain relationships with its key business
partners and customers, and others with whom it does business, or
on its operating results and businesses generally; the response of
CommScope’s competitors, creditors and other stakeholders to the
OWN/DAS Transaction; risks associated with the disruption of
management’s attention from ongoing business operations due to the
OWN/DAS Transaction; the ability to meet expectations regarding the
timing and completion of the OWN/DAS Transaction; potential
litigation relating to the OWN/DAS Transaction; restrictions during
the pendency of the OWN/DAS Transaction that may impact the ability
to pursue certain business opportunities, including uncertainty
regarding the timing of the separation, achievement of the expected
benefits and the potential disruption to the business; our ability
to integrate and fully realize anticipated benefits from prior or
future divestitures, acquisitions or equity investments; possible
future additional impairment charges for fixed or intangible
assets, including goodwill; our ability to attract and retain
qualified key employees; labor unrest; product quality or
performance issues, including those associated with our suppliers
or contract manufacturers, and associated warranty claims; our
ability to maintain effective management information technology
systems and to successfully implement major systems initiatives;
cyber-security incidents, including data security breaches,
ransomware or computer viruses; the use of open standards; the
long-term impact of climate change; significant international
operations exposing us to economic risks like variability in
foreign exchange rates and inflation, as well as political and
other risks, including the impact of wars, regional conflicts and
terrorism; our ability to comply with governmental anti-corruption
laws and regulations worldwide; the impact of export and import
controls and sanctions worldwide on our supply chain and ability to
compete in international markets; changes in the laws and policies
in the United States affecting trade, including the risk and
uncertainty related to tariffs or potential trade wars and
potential changes to laws and policies, that may impact our
products; the costs of protecting or defending intellectual
property; costs and challenges of compliance with domestic and
foreign social and environmental laws; the impact of litigation and
similar regulatory proceedings in which we are involved or may
become involved, including the costs of such litigation; the scope,
duration and impact of disease outbreaks and pandemics, such as
COVID-19, on our business, including employees, sites, operations,
customers, supply chain logistics and the global economy; our stock
price volatility; income tax rate variability and ability to
recover amounts recorded as deferred tax assets; and other factors
beyond our control. These and other factors are discussed in
greater detail in our 2023 Annual Report on Form 10-K and may be
updated from time to time in our annual reports, quarterly reports,
current reports and other filings we make with the Securities and
Exchange Commission. Although the information contained in this
press release represents our best judgment as of the date of this
release based on information currently available and reasonable
assumptions, we can give no assurance that the expectations will be
attained or that any deviation will not be material. Given these
uncertainties, we caution you not to place undue reliance on these
forward-looking statements, which speak only as of the date made.
We are not undertaking any duty or obligation to update this
information to reflect developments or information obtained after
the date of this press release, except to the extent required by
law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241217721610/en/
Investor Contact:
Massimo Disabato Massimo.Disaboto@commscope.com
News Media Contacts:
For CommScope publicrelations@commscope.com
For Apollo Communications@Apollo.com
For Monarch Alternative Capital Communications@monarchlp.com
CommScope (NASDAQ:COMM)
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