Author Topic: COMM - Commscope  (Read 1091 times)


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COMM - Commscope
« on: February 11, 2020, 06:52:00 AM »
I'm not an expert on telecom infrastructure. Is there anyone on the board who understands the competitive position of these businesses, and any resources to understand them better?

On the surface COMM seems like an interesting levered equity. Should generate lots of cash flow, and have already paid back ~$500 million in debt after owning Arris for less than a year. Arris is kind of a mixed bag of assets, with their CPE (Cable boxes, basically) business in long-term secular decline offset by some other businesses that are growing somewhat.

Stock Price: $13.78
S/O: 194.1 million
Market Cap: 2.7 billion
Cash: 600 million
Debt: 10.1 billion
Net Debt: 9.5 billion
EV: 12.2 billion

Generated $500 million in FCF last 12 months, but some due to working capital management.

Does anyone understand the business enough to know if they can stop the recent decline in a few of their segments?


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Re: COMM - Commscope
« Reply #1 on: February 11, 2020, 12:17:37 PM »
Had a double take there for a second after seeing $10bn in debt and $500m FCF...

Most people are willing to look at debt relative to EBITDA but it seems that most businesses struggle to turn $1 of EBITDA into even $0.50 of FCF... The debt relative to operating cash flow here would make me nervous (even for a business not in secular decline!)...

Just a thought!