Citing the impact of supply chain constraints, CommScope (NASDAQ: COMM) has decided to delay the previously announced spinoff of its Home Networks business unit (see "CommScope to spin off Home Networks business into independent public company"). The company said it has not determined a new date for the spinout.
“In light of the ongoing impact of supply chain pressures on the Home Networks business that began in the summer of 2021, including semiconductor supply decommits and extended component lead times, we have determined that market conditions are not currently conducive to proceeding with the planned spinoff of Home Networks into an independent company in the second quarter of 2022,” explained Chuck Treadway, CommScope’s president and CEO. “We remain committed to the merits of strategically separating Home Networks from CommScope, and still plan to execute on that strategy when clear evidence of a more normalized and predictable supply environment emerges.”
In a press release announcing the company’s results for the fourth quarter and full year ending December 31, 2021, CommScope added that the Home Networks unit had seen “unfavorable performance” in the second half of the year, “primarily” as a result of the supply chain issues.
CommScope announced its intentions in April 2021 to pare away the business unit via a tax-free spin-off to CommScope shareholders, forming a new and independent publicly traded company. At the time, CommScope expected to complete the move during the first quarter of this year. The spinoff would leave CommScope with three primary business areas: Broadband Networks, Venue and Campus Networks, and Outdoor Wireless Networks.