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Industry News

Andrew Expands Strategic Alliance With PCT/Andes Industries

January 25, 2007
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Andrew Corp., a global leader in communications equipment and systems, has significantly expanded its strategic relationship with PCT International Inc. and its holding company, Andes Industries Inc., through an agreement that will combine the companies’ broadband cable assets and create the first global entity that provides complete last-mile cable connectivity solutions to the broadband industry.


Under terms of the agreement, Andrew will receive approximately $16 M in cash and short-term notes, and will convert an existing note from Andes into a 30 percent equity stake in Andes, a Gilbert, Arizona-based developer, manufacturer and distributor of products for broadband communications networks. In addition, PCT will acquire Andrew’s broadband cable manufacturing operations in Yantai, China and all broadband cable inventories worldwide, and take operating responsibility for the combined business. The acquisition of the manufacturing operations in Yantai will be subject to the approval of the government authorities in the People’s Republic of China and other customary conditions.

“Our agreement with Andes will combine the complementary resources, capabilities and product portfolios of two companies that serve the same cable television multiple system operators (MSO),” said John DeSana, executive vice president and group president, Antenna and Cable Products Segment, Andrew Corp. “It is the best way to accelerate the profitable growth of this business and to achieve the scale and scope necessary to serve our customers better. The broadband market is strategically important to Andrew and we have worked hard over the past few years to build a market presence and achieve type-approval for our cable products from major North American MSOs. Our partnership with Andes and its PCT subsidiary significantly advances our efforts, enabling our combined entities to deliver compelling end-to-end solutions to cable MSOs around the world.”

The approximately 465 people currently employed in Andrew’s North American and international broadband cable business will transfer to PCT upon closing of the transaction, expected to be prior to the end of Andrew’s fiscal second quarter 2007. PCT will continue to manufacture and market broadband cable in certain markets under the Andrew brand utilizing the design, intellectual property and quality currently featured in Andrew’s broadband products.

“We are very excited about continuing and further strengthening our long-term relationship with Andrew,” said Steve Youtsey, president and chief executive officer, Andes Industries Inc. and PCT International Inc. “This transaction is an important step in further solidifying our position as a global leader in complete last-mile solutions for broadband communications networks. Andrew has developed tremendous expertise in transmission cable design and manufacturing, an important competency in delivering high quality products to our customers. We firmly believe our comprehensive offering of proprietary products, coupled with our value-added support and global reach, produce a compelling value proposition to our customers and shareholders alike.”

Andrew made a capital investment in Andes and its principal operating subsidiary, PCT International, as part of a strategic alliance formed in November 2003.

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