The stock market apparently approves of Tyco Electronics' (NYSE: TEL) bid to acquire ADC Telecommunications (Nasdaq: ADCT) for $1.25 billion, pushing ADC's stock to a 52-week high as details of the acquisition were released.
Tyco Electronics, in a conference call with analysts and the media, made it clear that it considered ADC a key building block in creating what Tyco Electronics' CEO Tom Lynch described as "a leader in connectivity in the telecom networks." Lynch, a former General Instrument/Motorola executive with experience in cable and wireless pointed to ADC's Distributed Antenna System (DAS) product line and technology as important components for Tyco Electronics' future business plans.
"The need for a DAS-type solution is really being brought to bear by a combination of smartphones and 4G where you need to augment the cellular network that's in place to provide more capacity and better quality of service," he said. While initially an indoor technology, "it serves the outdoor venue market as well," Lynch said.
The combined company, which Lynch said would generate about $2 billion in business, will chase the "broadband everywhere" trend as a "really, really good telecom networks business."
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