Proposal to Acquire Andrew Corporation

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Transcription:

Proposal to Acquire Andrew Corporation Creating The Global Leader in Providing Last Mile Solutions for Communications Networks Frank Drendel Chairman and Chief Executive Officer Brian Garrett President and Chief Operating Officer Jearld Leonhardt Executive Vice President and Chief Financial Officer August 7, 2006 1

Forward Looking Statements This presentation contains forward-looking statements regarding, among other things, the proposed business combination between CommScope and Andrew and the anticipated consequences and benefits of such transaction, and other financial and operational items relating to CommScope and Andrew. Statements made in the future tense, and statements using words such as intend, goal, estimate, expect, expectations, project, projections, plans, anticipates, believe, think, and scheduled and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not a guarantee of performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond the control of CommScope. These risks and uncertainties could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, and therefore should be carefully considered. Relevant risks and uncertainties relating to the proposed transaction include, but are not limited to: the risk that required regulatory review and approval may not be obtained in a timely manner, if at all; Andrew s directors and shareholders may not approve the proposed transaction; the anticipated benefits and synergies of the proposed transaction may not be realized; the integration of Andrew s operations with CommScope could be materially delayed or may be more costly or difficult than expected; the proposed transaction may not be consummated; legal proceedings may be commenced by or against CommScope. Relevant risks and uncertainties generally applicable to CommScope include, but are not limited to: changes in cost and availability of key raw materials and our ability to recover these costs from our customers through price increases; the challenges of executing our previously announced global manufacturing initiatives; customer demand for our products and the ability to maintain existing business alliances with key customers or distributors; the risk that our internal production capacity and that of our contract manufacturers may be insufficient to meet customer demand for our products; the risk that customers might cancel orders placed or that orders currently placed may affect order levels in the future; continuing consolidation among our customers; competitive pricing and acceptance of our products; industry competition and the ability to retain customers through product innovation; possible production disruption due to supplier or contract manufacturer bankruptcy, reorganization or restructuring; successful ongoing operation of our vertical integration activities; ability to achieve expected sales, growth and earnings goals; costs of protecting or defending our intellectual property; ability to obtain capital on commercially reasonable terms; regulatory changes affecting us or the industries we serve. For a more complete description of factors that could cause such a difference, please see CommScope s filings with the Securities and Exchange Commission, which are available on CommScope s website or at www.sec.gov. In providing forward-looking statements, the Company does not intend, and is not undertaking any duty or obligation, to update these statements as a result of new information, future events or otherwise. 2

A Compelling Proposal: Transaction Highlights $9.50 in cash per Andrew share of common stock Represents a 36% premium to current ADC Telecommunications, Inc. proposal A 20% premium to the current Andrew price of $7.89 Total transaction value of $1.7 billion, based on approximately 160 million Andrew shares outstanding and assumption of net debt of $186 million Transaction expected to be accretive to CommScope earnings, excluding special items, in the first full year after closing 3

A Compelling Proposal: Transaction Highlights Pro forma Debt/EBITDA ratio of 4.8x with plan to reduce leverage Fully financed proposal with commitments from Bank of America and Wachovia Proposal subject to customary conditions, including due diligence and entering into a merger agreement Proposal expires Friday, August 11, 2006 Prepared to conduct due diligence immediately and move quickly toward definitive agreement Closing expected by early 2007 4

CommScope Proposal Clearly Superior to ADC/Andrew Agreement Consideration CommScope 100% Cash, fully financed ADC 1 100% Stock Value Per Share Total Equity Value 2 $9.50, fixed $1,517 million $6.97, declined 45% since announcement, variable $1,112 million Premium to Implied ADC Offer 2 Premium/(Discount) to Current Andrew Stock Price 2 Downside Protection Expected Synergies 1 36% 20% Certainty of Cash $30-$50 million in year 1 $70-$90 million in year 2 (12%) None $18-$20 million in year 1 $36-$40 million in year 2 1) Based on public information. 2) Based on approximately 160m shares outstanding for Andrew Corporation. Based on stock prices as of August 4, 2006. 5

CommScope: Cable/Connectivity Solutions for the Last Mile Leader in the last mile : Enterprise Global leader in structured cabling/connectivity solutions Broadband Global leader in cable for HFC Carrier (Wireless & Wireline) One of the leading North American providers of: Environmentally secure cabinets for DSL/FTTN Cable for wireless transmission systems SALES BY SEGMENTS 1 SALES BY GEOGRAPHIC REGION 1 Carrier 16% Canada 3% Latin America 6% Asia Pacific 9% Enterprise 50% Broadband 34% EMEA 16% U.S. 66% Last mile is the distribution access or final link to the customer 1) 2005 CommScope Annual Report 6

Andrew: Global Leader In Wireless Communications Infrastructure Leading supplier of Antenna and Cable Products, Base Station Subsystems, Network Solutions and Wireless Innovations for the global communications infrastructure market SALES BY PRODUCTS 1 SALES BY GEOGRAPHIC LOCATION 1 Wireless Innovations 9% Satellite Communications 7% Asia Pacific 13% Network Solutions 8% Base Station Subsystems 23% Antenna And Cable Products 53% EMEA 32% Americas 55% 1) 2005 Andrew Annual Report 7

Powerful Strategic Rationale Enhances CommScope's global position as a leading provider of solutions for the last mile in communications networks Structured cabling solutions for the business enterprise Broadband cable for HFC applications Wireline and wireless communications infrastructure Expected to result in meaningful sales, operating and cost synergies Technology Products Manufacturing Customers Distribution SG&A CommScope Proven management team with relevant industry and integration experience Innovative aluminum cable technology Expanding margins through manufacturing and other cost management + Andrew Highly qualified employee base Global leader with premier brand and tier 1 customer base in wireless technology Comprehensive global manufacturing footprint Leading global cable and connectivity solutions provider with premier brand for the Broadband and Enterprise markets Leading global wireless solutions provider Wireless in-building coverage products 8

Identified Sources of Synergies EXPECTED COST SYNERGIES $30-$50m in Year 1, $70-$90m in Year 2 Rationalization of redundant locations >35 factory locations today on a combined basis Streamline overhead Technology transition Build upon CommScope s aluminum coax technology (approved by major customers) and Andrew customer base Procurement savings Integration of infrastructure REVENUE SYNERGIES Significant opportunities identified, but excluded from financial analysis 9

Compelling Financial Rationale Similar operating models (revenue growth and margin potential) Given CommScope s manufacturing discipline and commitment to operational excellence, expected annual cost savings: ~$30-$50 million in the first full year ~$70-$90 million in the second year Expected to be accretive to CommScope earnings in the first full year after closing, excluding special items Efficient financing structure enhances upside for CommScope shareholders Expect operational improvements combined with natural debt reduction to drive EPS growth Intend to reduce leverage on the balance sheet: Strong historical free cash flow generation Selected dispositions of non-core assets 10

CommScope s Proven Track Record of Shareholder Value Creation Stock Price $34.00 30.00 26.00 22.00 18.00 14.00 10.00 1/1/2004 4/28/2004 8/24/2004 12/20/2004 4/18/2005 8/14/2005 12/10/2005 4/7/2006 8/4/2006 CommScope s management team has successfully acquired, integrated, or managed a series of transactions in the cable industry: Acquisition of Superior Cable Division Forstmann Little LBO Acquisition of Alcatel s European coaxial cable business 19% of OFS secured access to optical fiber supply Acquisition of Connectivity Solutions business from Avaya, Inc. Grew Sales 1 33 % + Grew Operating Income 1 + 290% Grew Operating Margin 1 4% to 12 % CommScope has a strong global track record of integrating and managing acquisitions. 1) Based on 6 Months Ended June 30, 2004 to 6 Months Ended June 30, 2006. 11

Proven Management Team With Broad Industry Experience Frank Drendel, Chairman and CEO, >30 years with CommScope Brian Garrett, President and COO, >25 years with CommScope Jearld Leonhardt, EVP and CFO, >30 years with CommScope Eddie Edwards, EVP, >20 years in the industry, former President of RFS Ted Hally, EVP, >30 years in the industry, >10 in wireless with Motorola and others CommScope s executive management team has extensive experience in the product areas in which Andrew currently operates 12

Roadmap to Completion By Friday, August 11, Andrew declares CommScope proposal a Superior Offer CommScope prepared to commence due diligence immediately upon invitation from Andrew CommScope and Andrew execute definitive merger agreement Begin customary HSR and other regulatory approval processes Andrew files proxy statement with SEC Approval of transaction by Andrew shareholders and closing expected by early 2007 13