CommScope boosts data centre capabilities with Cable Exchange acquisition

CommScope boosts data centre capabilities with Cable Exchange acquisition

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CommScope has finalised the acquisition of Cable Exchange in a deal that is expected to broaden the former's range of capabilities in the data centre sector.

Based in Santa Ana, California, Cable Exchange is a privately held manufacturer of fibre optic and copper cables, trunks and related items. Its products are used for data, voice and video communications in high-capacity data centres and other business enterprise applications.

The firm has two manufacturing centres in the US - in Santa Ana and Pineville, North Carolina - and specialises in quick-turn delivery to customers.

CommScope's acquisition of Cable Exchange was funded with cash on hand. The California-based firm's staff and leadership team will join CommScope but will continue to operate as a stand-alone business within the larger group's Connectivity Solutions division.

The deal, which was described as "highly complementary", is set to provide further support for ongoing growth in the market for high-capacity, multi-tenant and hyperscale data centres, which are operated by some of the world's largest technology and retail companies.

Data centres are growing in size and complexity as the amount of user-driven information and commerce traffic travelling across networks continues to increase.

Eddie Edwards, president and chief executive officer of CommScope, said: "We welcome the Cable Exchange team to CommScope. As a respected provider of critical network infrastructure with strong customer relationships, Cable Exchange will further expand our capabilities in the data centre market.

"They are a great match for CommScope and we believe Cable Exchange's leadership in the attractive quick-turn industry will complement our efforts in addressing this important market opportunity."

Shortly after announcing this acquisition, CommScope published its financial results for the second quarter of 2017. The figures showed total sales of $1.17 billion (£893.5 million) and net income of $55 million.

In comparison, the three months to the end of June 2016 delivered sales of $1.31 billion and net income of $62 million.

Despite this year-on-year decline, there were some positive trends for the firm during the second quarter of this year, including moderate growth for its Connectivity Solutions business in the Europe, Middle East and Africa region. CommScope also improved its market position with multi-tenant and hyperscale data centre customers.

Discussing the latest results, Mr Edwards said they reflected "the continued impact of the challenging industry environment". He also noted that North American service providers are expected to spend cautiously over the coming quarters, primarily because of factors such as industry consolidation, the timing of large projects and "competitive dynamics".

"In the interim, we will continue to stringently manage our costs and work to position CommScope for long-term success," added Mr Edwards.

Along with the acquisition of Cable Exchange, the company's new high-speed migration platform is also expected to strengthen CommScope's position in the data centre market over the long term. The firm is anticipating a return to overall growth in 2018.

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