CommScope’s headquarters. The company is spinning off its home-networking business.
Davis Turner/Bloomberg
CommScope Holding stock is trading higher Thursday after the communications-hardware company announced plans to spin off its home-networking business as an independent company, while taking other steps to reduce operating costs.
CommScope (ticker: COMM) said the moves are part of a program to “optimize the business portfolio, drive above-market growth, and control costs.” CommScope said the spin will be in the form of a tax-free distribution to shareholders and will be completed by the end of the 2022 first quarter.
CEO Chuck Treadway said that since he joined the company in October, the board and management team have undertaken a comprehensive review of the company’s portfolio. “As we proceeded with this review, it became clear that the Home Networks business’ distinct strategy, growth characteristics, investment requirements and returns on invested capital are not aligned with the rest of our portfolio,” he said in a statement. “We believe that Home Networks will be better positioned to deliver superior home and consumer-oriented products as an independent company.”
CommScope said that after the spin it will have three business segments: broadband networks; venue and campus networks; and outdoor wireless networks.
The CEO of the as-yet unnamed new company will be Joe Chow, now senior vice president of the home networks business. The new company will be listed on Nasdaq.
CommScope stock is up 4.1% to $16.05.
Write to Eric J. Savitz at [email protected]
