CommScope (NASDAQ: COMM), the Claremont, NC-based network connectivity gear manufacturer, was selected by Casa Systems, Inc. as the highest and best bidder to acquire Casa’s Cable Business assets. CommScope and Casa Systems entered a purchase agreement on May 29, after CommScope submitted the winning bid of $45.1 million for the Casa’s Cable Business assets through an auction process under Section 363 of the Bankruptcy Code. A sale hearing is scheduled for June 4, 2024, and the transaction is expected to close June 6, 2024.
In a statement, CommScope said that Casa Systems is a strategic accretive acquisition that strengthens CommScope’s Access Network Solutions market position, including enhancing its virtual cable modem termination system (vCMTS) used by cable companies and its passive optical network (PON) product offerings used by fiber broadband providers.
CommScope suggests the economics of the deal are supported by significant synergies. “As a leader in the cable industry, we are quite pleased by the opportunity to acquire Casa’s cloud-native network solutions,” stated Chuck Treadway, CEO, CommScope. “Adding Casa’s technology to our portfolio will allow us to provide a seamless transition for our combined [telco and cable] customer base that utilize both integrated and virtual CMTS products.”
Treadway added that the transaction provides stability to Casa’s customers while allowing CommScope to further grow its customer base by enabling customers to migrate to Distributed Access Architecture solutions on their own timeline.”
As the auction winner, CommScope stands to expand its cable portfolio with Casa products that include fiber nodes, integrated cable modem termination system (I-CMTS) chassis, as well as a new virtual CMTS that has gained traction with Canada’s Rogers Communications (NYSE: RCI) and Claro Colombia, Lightreading reported.
Casa’s virtual broadband network gateway could serve as a complement to CommScope’s fiber access business, but there is significant overlap between CommScope and Casa in I-CMTSs, vCMTSs and fiber nodes.
CommScope could gain some market share with the Casa transaction. For instance, Charter Communications (NASDAQ: CHTR) has some legacy Casa I-CMTSs in the New York City market, although Casa is not participating Charter’s hybrid fiber/coax upgrade project, which includes upgrades to a distributed access architecture and vCMTS deployments in a portion of the cableco’s footprint.
Global customers such as the U.K.’s Vodafone (NASDAQ: VOD) and Liberty Global (NASDAQ: LBTYA), Canada’s Rogers and Videotron, and Japan’s J:COM are among Tier 1 customers of Casa’s legacy CMTS and fiber node products. Once its winning bid clears the bankruptcy court, CommScope will obtain that legacy business and likely put it in position to support future network upgrades at those operators.
CommScope believes the transaction for Casa’s cable assets will help to shore up the market position of its Access Networks Solutions unit and deliver “significant synergies.”
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