Antec Corp. Shares Surge 43% as AT&T Deal Valued at $900 Million

Strategic Insights -

Eager investors propelled Antec Corp.'s shares up 43 percent after the announcement of a major deal with AT&T, potentially worth $900 million. The pact, which calls for Antec to supply equipment for AT&T to upgrade cable television lines to carry phone conversations to 2 million homes, sent Antec stock up $5.25 to close at $17.37 1/2. The deal has significant implications for both companies, as it tests the notion that cable companies can compete profitably by providing telephone, computer, and television service.

Key Takeaways:

  • Antec Corp.'s shares surged 43 percent after the announcement of a major deal with AT&T, valued at $900 million.
  • The deal calls for Antec to supply equipment for AT&T to upgrade cable television lines to carry phone conversations to 2 million homes.
  • Antec's technology uses hybrid fiber-coaxial lines that can carry voice, data, and video, allowing cable companies to compete with phone companies.
  • The company's equipment can also let a cable company add lines to a home electronically, a significant advantage over phone companies.
  • Antec has a relatively low profile despite reaching $529 million in revenue during the past year, and has been developing its technology for only recent years.
  • The company has a global presence, with international business in Argentina, Austria, Japan, and China.
  • Antec's competitors include Scientific-Atlanta, a much larger neighbor, but its product line does not include satellite and cable modems.
  • The success of the deal will be closely watched, particularly in the next few years, as it tests the notion that cable companies can compete profitably in the phone market.

Statistics:

  • Antec's shares surged 43 percent after the announcement of the AT&T deal.
  • The valuation of the deal is estimated at $900 million.
  • Antec reached $529 million in revenue during the past year.
  • The company has about 2,800 employees, with 300 based in Norcross.
  • Antec's technology can carry voice, data, and video signals over hybrid fiber-coaxial lines.
  • The company's equipment can add lines to a home electronically, a significant advantage over phone companies.
  • AT&T is investing $46 billion in purchasing TCI, a huge cable company, with the goal of competing in the local phone market.

Sources:

  • Associated Press
  • Paul Kagan Associates
  • Telecommunications Industry Association
  • Forbes