CommScope Inc. is talking to asset management firm Carlyle Group about being taken private in a deal valued at about $2.98 billion.
The network infrastructure company said Monday that Carlyle Group would pay $31.50 per share in cash, a 36 percent premium over its closing price Friday. CommScope currently has 94.7 million outstanding shares, according to Thomson Reuters.
Shares of CommScope jumped $8.08, or 35 percent, to $31.20 in premarket trading. The stock had closed at $23.12 on Friday.
CommScope said it has yet to reach a deal and will not make further comments until it's deemed appropriate.
Carlyle invests in a wide range of industries, with about 8 percent of its holdings in consumer and retail companies. It closed on its $3.8 billion buyout of vitamin maker NBTY earlier this month.
KeyBanc Capital Markets analyst Anthony Kure said a deal would make sense, given a combination of CommScope's market position, its shares' relative under-valuation and growing demand from wireless carriers around the world.
CommScope, Kure said, is one of the world's top infrastructure suppliers to wireless carriers, and the top supplier of cables to "many Fortune 500 companies." As such, he added, it is likely to see increased demand as wireless carriers are faced with customers who need more coverage and more bandwidth to power their growing reliance on mobile devices.
It also helps that CommScope's shares are relatively cheap. The stock, Kure said in a note to investors, have "remained pressured since reporting (second-quarter results) and have yet to materially recover."
CommScope, based in Hickory, N.C., makes fiber-optic and other cables for telephone, cable and Internet service providers. Its customers include Alcatel-Lucent Inc., AT&T Inc. and Vodafone Group PLC.
In July, CommScope posted net income of $44 million, or 43 cents per share, for the second quarter. Its revenue of $838 million was 7 percent higher than the same period a year earlier. It forecast third-quarter revenue of $815 million to $865 million.
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