- 25Oct
(Reuters) - Private equity firm Carlyle Group CYL.UL is in talks to buy CommScope Inc (CTV.N) for about $3 billion, the communications cable maker said on Monday.
It is the latest sign of resurgent acquisitions for private equity firms, which are under pressure to invest billions of dollars of capital raised in the past few years.
Leveraged buyouts plummeted after the credit crisis limited access to debt financing. But the financing markets have since improved enough for large deals to be struck again. In July, Carlyle struck a $3.8 billion deal to buy U.S. nutritional supplements maker NBTY Inc.
Under the terms of the potential agreement, Carlyle would buy all of the outstanding shares of CommScope common stock for $31.50 per share in cash, a premium of 36 percent to their Friday's close, CommScope said.
CommScope shares rose to $30.15 in early morning trading on Monday; trading below Carlyle's offered price.
A potential deal would value the company at $2.98 billion, based on 94.72 million shares outstanding as of 21 July, according to Thomson Reuters data.
"We believe such a deal could make sense given the strong experienced management team, solid end-market demand, and the company's ability to generate profits and free cash flow," Soleil Securities analyst Michael Genovese said, noting that the stock has been down about 13 percent year-to-date.
CommScope said no agreement has been reached yet and there can be no assurance that any transaction will result from these discussions.
Allen & Company LLC is serving as financial adviser to CommScope.
In CommScope's quarterly report in July, it forecast weak third-quarter sales and said it would be difficult to boost operating income this year.
DEAL VOLUME
Deal volume among private equity firms has been increasing, with interest among private equity firms in taking hard drive maker Seagate Technology (STX.O) private, sources familiar with the situation have said.
Private equity firms are also circling hair-salon operator Regis Corp (RGS.N) sources familiar with the situation previously told Reuters.
