Amphenol (APH) is nearing a $10.5 billion deal to buy CommScope Holding’s (COMM) broadband connectivity and cable unit, called CCS. According to a report by the Wall Street Journal, the transaction could be completed today, citing people familiar with the matter. The $10.5 billion deal, including debt, would mark Amphenol’s largest acquisition to date and boost its presence in the communications infrastructure market.
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Amphenol’s products and solutions are seeing high demand due to the rapidly growing need for data centers, cloud computing, and artificial intelligence (AI) applications. Last year, Amphenol acquired CommScope’s outdoor wireless network (OWN) and distributed antenna systems (DAS) units for $2.1 billion, strengthening its position in both wired and wireless communication segments.
Why Is Amphenol Buying CommScope’s CCS Unit?
Amphenol is one of the world’s largest manufacturers of electronic, electrical, and fiber optic connectors, cable and interconnect systems, sensors, and antenna solutions. Its products are used in a wide range of devices and infrastructure, such as smartphones, vehicles, aerospace and defense equipment, broadband systems, data centers, and industrial automation.
CommScope provides network infrastructure and connectivity solutions to the communications, data center, enterprise, and broadband markets. The company designs and manufactures both the hardware and the software intelligence that powers digital networks.
CommScope’s CCS business makes fiber-optic and copper cables used for things like cable TV, home internet networks, and data centers. This is CommScope’s largest division by sales and operating income, generating $2.8 billion in sales in 2024. The CCS unit has seen increasing demand from private equity firms and businesses, as its parent, CommScope, is struggling with a heavy debt burden and has been offloading assets to reduce its liabilities.
Is Amphenol a Good Stock to Buy?
Analysts remain highly optimistic about Amphenol’s long-term outlook. On TipRanks, APH stock has a Strong Buy consensus rating based on six Buys and two Hold ratings. The average Amphenol price target of $115.13 implies 10.4% upside potential from current levels. Year-to-date, APH stock has surged nearly 51%.
