The Carlyle Group is in talks to buy telecommunications equipment-maker CommScope for $3 billion, the latest in a string of billion-dollar deals by the buyout firm.
CommScope on Monday confirmed the discussions, which it said could result in CommScope becoming a private company if Carlyle buys all of its shares for $31.50 apiece.
Carlyle’s bid for CommScope comes as private equity firms look to take advantage of relatively cheap credit and low prices for acquisitions.
The buyout industry all but ground to a halt in the wake of the financial crisis, but analysts and industry sources said the sector has loosened up during the past six months.
“This is a large deal even by (private equity) bubble standards,” said Dan Primack, a private equity analyst with .
A source familiar with the negotiations said Carlyle was in talks with CommScope management. Any purchase must to go before the board and then be approved by shareholders. The source spoke on condition of anonymity because the talks are ongoing.
CommScope builds equipment that is expected to be in greater demand as the telecommunications industry moves from copper wires to fiber optics. Shares of the North Carolina-based company jumped more than 30 percent after the talks were disclosed on Monday, closing at $30.16.
Primack said the CommScope deal could be a nice fit for both companies.
“This is Carlyle’s sweet spot,” he said. “It has a large communications investment practice.”
Carlyle incurred substantial losses in recent years on a pair of telecommunications investments — Hawaiian Telcom and a Japanese mobile phone company — that soured when the companies sought bankruptcy protection.
With tens of billions in clients’ capital sitting on the sidelines, Carlyle has been hunting for good investments.
