Communications equipment maker, ADC Telecommunications Inc. has signed a definitive agreement to buy Andrew Corp. for about USD 2 billion in stock to boost its wireless technology. Andrew is a maker of coaxial cable and network communications equipment.
Under the terms of the agreement, 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 about 56 percent of the combined company and Andrew shareholders will own about 44 percent of the combined company. ADC will assume all debt of Andrew and Andrew's convertible notes will become convertible into ADC shares.
For the most recent reported twelve months as of May 31, 2006, combined sales for the two companies on a pro forma basis totaled about USD 3.3 billion, the companies said in a statement.
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 companies said they expect to generate additional pretax profit of USD 70 million to USD 80 million in the third year after closing the deal. ADC and Andrews said the deal, which is subject to shareholder and regulatory approvals, should close in four to six months.
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