Tyco acquires ADC to spruce up broadband offerings

In yet another attempt to be a part of the new broadband wave, Tyco Electronics today announced its acquisition of ADC Telecommunications, primarily targeted at offering high-speed broadband connectivity.

Though the deal will take 3-6 months to be finalised, Tyco will acquire ADC for a sum of approximately $1.25 bn, or $12.75 per share in cash. This will help position Tyco's Network Solutions segment, as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world, as the complementary product offerings will help customers deliver high speed data and video communications.

The acquisition of ADC will strengthen Tyco's market leadership position in India. The Bangalore-based ADC India Communications has a manufacturing facility at Peenya, Bangalore. It has regional sales offices in New Delhi, Mumbai, Chennai, Hyderabad, Pune and Kolkata. ADC India employs 140 professionals in the country.

According to Tom Lynch, CEO, Tyco, “Customers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using — from smart phones to HD, and 3D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

The combined organisation will offer a complete product portfolio across every major geographic market. It will also add ADC's Distributed Antenna System (DAS) products, which will expand Tyco Electronics' wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC's professional services organisation in the US to its business.

Robert E. Switz, chairman, president and CEO of ADC said, “As part of Tyco Electronics, our organisation's ability to serve leading telecom service providers and enterprises will be strengthened significantly. Tyco Electronics shares our commitment to meeting customers changing next generation network needs.”

The transaction is structured as a tender to be soon followed by a merger, subject to customary closing conditions, including a tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter of 2010. Details of a change in company name and further investment plans are yet to be disclosed.

In February this year, ADC Krone changed its name to ADC India Communications, providing customers in India and neighbouring countries access to the ADC and KRONE portfolio of infrastructure products and solutions under a single brand — ADC. ADC earlier acquired the KRONE Group in 2004 to strengthen its position as a global provider of network infrastructure solutions in the Asia Pacific and Europe/Middle East/Africa regions.

berylm@cybermedia.co.in