TE Connectivity reports that it will sell its subsea communications business (SubCom) to equity firm Cerberus Capital Management for $325 million in cash.
A press release said that SubCom has completed more than 100 cable systems and deployed over 610,000 km of cable through its eight cable ships. The deal, which includes the plant, 63 employees, and all the related process, development and sales elements, is expected to close by the first quarter of 2019.
TE Connectivity, which has an annual revenue of $13 billion from connectivity business, reports that it will use proceeds from the sale to fund share repurchases. “It strengthens our business model; resulting in a stronger growth profile, reduced cyclicality, higher margins and a greater return on investment,” said TE Connectivity CEO Terrence Curtin.
In other news, SubCom reports that it has won a contract from MainOne, a global connectivity and data center solutions provider, to extend its submarine cable system into West Africa’s francophone region. Its additional branches connecting Senegal (Dakar) and Cote D’Ivoire (Abidjan) will connect to MainOne’s 7,000-km cable system, which extends from Portugal to Nigeria, and will inject new technology that upgrades the system to a potential capacity of 10TBps by November 2019 when the subsea system becomes operational.