Vantiva, formerly known as Technicolor, is set to make a significant move by acquiring CommScope’s Home Networks division, a major provider of residential connectivity and video set top box solutions based in the United States.
The planned acquisition, expected to be completed in late Q4 2023, signifies a transformative transaction for Vantiva, paving the way for substantial growth and innovation in the Connected Home sector.
In the last twelve months leading up to June 2023, CommScope Home Networks and Vantiva’s Connected Home have collectively generated a sales revenue of $1.5 billion and €2 billion, respectively. Luis Martinez-Amago, CEO of Vantiva, emphasized the strategic importance of this acquisition, stating, “This planned strategic acquisition represents a unique transformative opportunity for Vantiva.”
The acquisition is projected to significantly augment Vantiva’s Connected Home capabilities, expanding its client portfolio, global presence, and innovation capabilities by integrating the best practices from both entities. This strategic move aligns with Vantiva’s diversification strategy and aims to deliver enhanced value to its customers.
Upon completion of the acquisition, CommScope is set to receive a 25 percent stake in Vantiva as part of the consideration for the Home Networks business. Additionally, there is a provision for a maximum cumulative earn-out of $100 million in cash, contingent upon Vantiva achieving an EBITDA equal to or exceeding €400 million in a fiscal year over the next five years.
The integration of Home Networks into Vantiva’s Connected Home division is expected to enhance operational efficiency through increased scale. The transaction is anticipated to generate over €100 million in pre-tax cash synergies on a run-rate basis, primarily driven by cost optimization initiatives and operational efficiencies, estimated to be reached by fiscal year 2026.
The transaction is subject to regulatory approvals and customary closing conditions, with approval already granted by the respective boards, including key shareholders such as Angelo Gordon, Bain Capital, and Bpifrance, as well as the support of Briarwood, the largest non-board shareholder. Stay tuned for further updates on this significant development in the technology and connectivity sector.