CommScope nearly doubles after selling connectivity and cable division to Amphenol

Shares of mid-cap network infrastructure provider CommScope soared more than 86% to a four-year high yesterday, Aug. 4. Its broadband connectivity and cable TV division will be bought by fiber-optic cable maker Amphenol for more than triple the market capitalization of all of CommScope. The deal is an example of how AI is turning data-center components into one of the hottest areas of the market, writes Barron's.

CommScope jumped more than 86% yesterday to $14.51 per share, its highest mark since September 2021. This is how investors reacted to the news that the broadband connectivity and cable unit would be sold to Amphenol. 

The deal is valued at $10.50 billion. By comparison, CommScope's capitalization on the Nasdaq after yesterday's rally is $3.21 billion. 

The company plans to spend the proceeds from the deal to pay down debt, buy back all preferred stock from the investment firm Carlyle, and add leverage on the rest of the business, it said in the deal announcement. Even after that, CommScope will still have "significant excess cash," which it intends to distribute to shareholders in the form of dividends within 60-90 days after the deal closes. The company expects that to be in the first quarter of 2026 and will be subject to regulatory and shareholder approval of the deal. 

The CommScope unit being acquired by Amphenol provides fiber-optic and copper-connectivity cables for data centers, cable television, and residential broadband networks. It accounted for 63.3% of CommScope's net sales in the second quarter of 2025, the company reported. Net sales rose nearly 32% year over year to $1.39 billion in the period.

The deal will expand Amphenol's interconnect product capabilities in the fast-growing IT datacom market, particularly adding fiber optic interconnect products for AI and other data center applications, and further diversifies Amphenol’s broad portfolio of product solutions, the company announced. It expects the acquired business to have an EBITDA margin of 26% in 2025 on sales of approximately $3.6 billion, assuming a continuation of current economic conditions. 

While semiconductor and utility stocks have been the standout gainers in the rush to build AI data centers, networking infrastructure companies are also set to benefit, resulting in a flurry of deals, writes Barron's. In 2024, Hewlett Packard announced the purchase of networking equipment maker Juniper Networks for $14 billion, and Nokia the purchase of optical transmission equipment maker Infinera for $2.3 billion.

The AI translation of this story was reviewed by a human editor.