ADC Telecommunications

ADC Telecommunications was an American communications-network infrastructure company headquartered in Eden Prairie, Minnesota. Its history began in Minneapolis in 1935, when Ralph Allison and Walter Lehnert founded the Audio Development Company. The business initially manufactured hearing aids and audiometers, first for Maico and later under its own name. Its early work in audio systems also produced jacks, plugs, patch cords, and jackfields, products that later became the foundation of its telecommunications activities. After selling its audiometer line in 1949, ADC diversified into transformers, filters, military electronics, and telephone connection components. A 1961 merger with Magnetic Controls Company created ADC Magnetic Controls and expanded the company’s exposure to power supplies, magnetic amplifiers, and products associated with the U.S. space program. Although some of its transformer activities grew strongly during the 1960s, the company’s longer-term direction was shaped by its development of telecommunications connectors. Its bantam jack became an important compact component for telephone-circuit access and patching. During the 1970s, ADC moved beyond individual components into prewired jackfields, connectorized assemblies, and test equipment for telephone operating companies. By 1976, it was described as the largest independent supplier of test boards in the United States. The 1980s deregulation of AT&T and the creation of the seven Regional Bell Operating Companies substantially enlarged the addressable U.S. telecommunications market. ADC became a supplier to those carriers and expanded its role in network access and communications infrastructure. In the 1990s and 2000s, ADC pursued a broad acquisition strategy. It bought companies involved in data communications, fiber optics, broadband access, wireless coverage, and related network technologies. Notable transactions included Telinq, Fibermux, PairGain Technologies, KRONE, Fiber Optic Network Solutions, OpenCell, LGC Wireless, and Century Man Communications. These acquisitions were intended to move ADC beyond traditional hardware and into higher-growth data, broadband, fiber-to-the-x, and wireless applications. The strategy also included attempts to broaden the business into software, although the company experienced difficulty creating consistent synergies across its acquired operations. ADC’s business covered copper and fiber connectivity, distribution and termination systems, broadband access infrastructure, wireless-network equipment, optical transport, network test products, and related communications facilities equipment. Its customers included telecommunications carriers, cable and broadband operators, network contractors, and enterprise or institutional network users. The company’s portfolio reflected the industry’s transition from legacy copper networks toward fiber-optic and broadband architectures. The telecommunications downturn and the collapse of the dot-com boom placed pressure on ADC’s strategy and market valuation. ADC sold or divested several businesses, including Kentrox and its American Lightwave Systems division, while continuing to consolidate around network infrastructure. In July 2010, Tyco Electronics agreed to acquire ADC for cash. The transaction was completed on December 9, 2010, and ADC ceased to exist as a separate public company. Tyco Electronics later became TE Connectivity. In 2015, CommScope acquired TE Connectivity’s Broadband Network Solutions business, which included the former ADC operations, in a transaction that closed on August 31. ADC therefore survives primarily as a historical brand and as part of businesses transferred through successive corporate ownership changes.

ADC Telecommunications was founded in Minneapolis in 1935 by Ralph Allison and Walter Lehnert as the Audio Development Company. Its earliest products were hearing aids and audiometers. The company also designed audio systems, and the associated jacks, plugs, patch cords, and jackfields established a product foundation that later supported its move into telecommunications. ADC sold its audiometer business in 1949 and subsequently diversified into transformers, power-line filters, military electronics, and telephone connection products. In 1961, it merged with Magnetic Controls Company, forming ADC Magnetic Controls. The merged company had mixed results across its product initiatives, but its telecommunications components became increasingly important. The bantam jack, a compact telephone-circuit access and patching component, was among its most notable innovations. During the early 1970s, ADC introduced prewired and connectorized jackfields, wired assemblies, and test equipment for telephone operating companies. By 1976, it had become the largest independent supplier of test boards in the United States. The 1983 breakup and deregulation of AT&T created seven Regional Bell Operating Companies and expanded the U.S. telecommunications equipment market. ADC supplied these new carrier organizations and grew its network-infrastructure business. ADC pursued acquisitions during the 1990s and 2000s to expand into data communications, optical networking, broadband, and wireless systems. Its acquisitions included Telinq in 1990, Fibermux in 1993, the Apex Group in 1997, Saville in 1999, Altitun and PairGain Technologies in 2000, KRONE in 2004, Fiber Optic Network Solutions and OpenCell in 2005, G-Connect in 2006, LGC Wireless in 2007, and Century Man Communications in 2008. It also merged with Information Transmission Systems and acquired American Lightwave Systems, although some of these businesses were later sold or divested. The acquisition program was intended to move ADC into broader data-communications and network-infrastructure markets. In practice, the company found it difficult to obtain consistent operating synergies among its acquired businesses. ADC also attempted to supplement its hardware strategy with software, but this produced limited results. The dot-com collapse and the broader telecommunications downturn put additional pressure on the company and its stock valuation. ADC later concentrated more heavily on copper and fiber connectivity, broadband access, fiber-to-the-x infrastructure, optical systems, wireless coverage, and communications-facility products. In July 2010, Tyco Electronics agreed to buy ADC for cash. The acquisition was completed on December 9, 2010, and ADC ceased to operate as an independent public company. Tyco Electronics subsequently became TE Connectivity. In 2015, TE Connectivity sold its Broadband Network Solutions business to CommScope; the former ADC business was included in that transaction, which closed on August 31, 2015.

1. 2015Former ADC business transfers to CommScope

   CommScope completes its purchase of TE Connectivity’s Broadband Network Solutions business, which includes the former ADC operations.

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2. 2010Acquired by Tyco Electronics

   Tyco Electronics completes its acquisition of ADC on December 9, ending ADC’s independent corporate and stock-market identity.

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3. 2005Expands fiber and wireless portfolios

   ADC acquires Fiber Optic Network Solutions and OpenCell to strengthen fiber-to-the-x offerings and wireless network coverage and capacity products.

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4. 2004Acquires KRONE

   The acquisition adds copper- and fiber-based connectivity products and services.

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5. 2000Acquires PairGain Technologies

   ADC acquires PairGain Technologies in a stock transaction reported at approximately $1.6 billion, expanding its broadband access capabilities.

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6. 1990Acquires Telinq

   ADC begins a period of telecommunications and data-communications acquisitions with the purchase of Telinq.

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7. 1983Expands with U.S. telecommunications deregulation

   The AT&T divestiture and formation of the Regional Bell Operating Companies enlarge the market available to ADC and other telecommunications suppliers.

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8. 1976Becomes a leading independent test-board supplier

   ADC is identified as the largest independent supplier of test boards in the United States.

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9. 1961Merger with Magnetic Controls Company

   The merger creates ADC Magnetic Controls and adds power-supply and magnetic-amplifier capabilities.

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10. 1949Audiometer business is sold

    ADC sells its audiometer product line and shifts its attention toward electronics, power-related components, military products, and telephone connection hardware.

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11. 1935Audio Development Company is founded

    Ralph Allison and Walter Lehnert establish the company in Minneapolis, initially focusing on hearing aids and audiometers.

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A communications infrastructure supplier serving carriers, broadband operators, network builders, and enterprise network environments with connectivity, distribution, access, and network-management equipment.

• Copper connectivity systemsTelecommunications network infrastructure

  ADC supplied copper-network connectors, distribution equipment, jackfields, patching components, and related management hardware. These products supported telephone access networks, carrier facilities, and other communications installations during the period when copper remained the dominant access medium.

• Fiber-optic connectivity systemsOptical network infrastructure

  The company developed and acquired products for fiber termination, distribution, connection, and network organization. These systems served broadband access networks, communications facilities, and fiber-to-the-x deployments as carriers upgraded from copper infrastructure.

• Network test equipmentTelecommunications test equipment

  ADC produced test boards and associated equipment for telephone operating companies. Its prewired assemblies and test systems helped network operators access, patch, monitor, and troubleshoot circuits in carrier facilities.

• Broadband access and FTTX infrastructureBroadband network equipment

  Through organic development and acquisitions such as PairGain and Fiber Optic Network Solutions, ADC offered infrastructure associated with broadband access and fiber-to-the-x networks. The portfolio addressed the transition toward higher-capacity wired access systems.

• Wireless coverage and capacity equipmentWireless communications infrastructure

  ADC expanded into wireless network infrastructure through OpenCell and LGC Wireless. The related products were intended to improve indoor or localized wireless coverage and increase network capacity for carrier deployments.

• 2015Transfer of former ADC operations to CommScopeM&A

  TE Connectivity reorganized its portfolio and agreed to sell its Broadband Network Solutions business, which included the former ADC activities.

  What changed. TE Connectivity agreed to sell the business to CommScope in an all-cash transaction reported at $3.0 billion. The transaction closed on August 31, 2015.

  Aftermath. The former ADC business became part of CommScope’s broadband and network-infrastructure operations.

  Reported transaction value. $3.0 billion (Announced January 2015; closed August 31, 2015)

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• 2010Accept acquisition by Tyco ElectronicsM&A

  ADC had become a diversified network-infrastructure supplier after years of acquisitions, but its independent strategy faced pressure from telecommunications-market volatility and the difficulty of integrating multiple businesses.

  What changed. ADC agreed to be acquired by Tyco Electronics for reported cash consideration of $12.75 per share, with an enterprise value of approximately $1.25 billion.

  Aftermath. The transaction closed on December 9, 2010. ADC ceased to exist as a separate listed company and its operations became part of Tyco Electronics, later renamed TE Connectivity.

  Reported acquisition consideration and enterprise value. $12.75 per share; approximately $1.25 billion enterprise value (Announced and completed in 2010)

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• 2015CommScope agrees to acquire TE Connectivity’s Broadband Network Solutions business

  CommScope announced an agreement to purchase TE Connectivity’s Broadband Network Solutions business, including the former ADC operations, in an all-cash transaction valued at $3.0 billion.

  M&A
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• 2015CommScope closes Broadband Network Solutions acquisition

  The transfer of TE Connectivity’s Broadband Network Solutions business to CommScope closed on August 31, 2015, placing the former ADC business within CommScope.

  M&A
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• 2010ADC agrees to be acquired by Tyco Electronics

  Tyco Electronics agreed to acquire ADC Telecommunications for cash at a reported price of $12.75 per share, with an announced enterprise value of approximately $1.25 billion.

  M&A
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• 2010TE Connectivity completes acquisition of ADC Telecommunications

  The acquisition of ADC by Tyco Electronics, later known as TE Connectivity, was completed on December 9, ending ADC’s existence as an independent listed company.

  M&ALeadership change
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1. ADC Telecommunications