CommScope Holding (NASDAQ:COMM) Company, Inc. (NASDAQ:COMM), a key player in the broadcast and communications equipment sector, has announced on Thursday a forthcoming dividend for its Series A Preferred Stock holders. The declaration was made by the company's Board of Directors on September 25, 2024.
In a recent SEC filing, CommScope detailed that the dividend would be distributed as a dividend in kind, consisting of 16,421 additional shares of Series A Preferred Stock. Additionally, the company will pay a nominal cash amount of $88.75 in aggregate to cover any fractional shares that cannot be issued. The dividend is scheduled to be paid on September 30, 2024.
This move follows a series of similar dividends paid in kind, with the company having previously issued 162,085 shares of Series A Preferred Stock to holders by December 31, 2023, and further dividends of 15,978 and 16,198 shares on March 31 and June 30 of 2024, respectively. These dividends have been issued to investors who held shares on the record dates of March 15 and June 15, 2024.
The dividends are part of the terms agreed upon in an Investment Agreement with Carlyle Partners VII S1 Holdings, L.P. ("Carlyle"), dating back to November 8, 2018, when Carlyle invested $1.0 billion in CommScope for 1,000,000 shares of Series A Preferred Stock at $1,000 per share.
CommScope has confirmed that the dividend is exempt from registration under the Securities Act of 1933, as amended, by virtue of Section 4(a)(2). Carlyle, an accredited investor as defined in Rule 501 of the Securities Act, has acknowledged the shares are for investment purposes and not intended for distribution.
In other recent news, connectivity firm CommScope has been active in forming partnerships and launching new products. The company has joined forces with AFL to manufacture Prodigy® universal fiber-to-the-home (FTTH) solutions, a move aimed at meeting the increasing global demand for FTTH installations. CommScope also partnered with Nokia (HE:NOKIA) to introduce an AI-driven Wi-Fi and fiber connectivity solution, designed to enhance user connectivity in various industry sectors.
CommScope has also been busy on the product front, unveiling the RUCKUS Pro AV portfolio, a suite of networking solutions designed for professional audiovisual installations. Additionally, the company launched the HX6-611-6WH/B antenna, aimed at enhancing the capacity of microwave backhaul networks.
The company's financials have also been in the spotlight, with second-quarter net sales reported at $1.387 billion and an adjusted EBITDA of $302 million. Analysts from Jefferies have maintained a Hold rating on CommScope stock, raising the price target to $2.50 due to ongoing concerns such as inventory reductions and demand challenges.
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