ADC Telecommunications

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ADC Telecommunications
Former type Public company (NASDAQ)
Industry Communications Services
Fate Acquired
Successor(s) TE Connectivity
Founded Minneapolis, Minnesota 1935
Defunct 2010 (acquisition completed)
Headquarters Harrisburg, Pennsylvania, USA
Key people Alan Clarke, President & CEO of TE Connectivity
Products Networking hardware, Wireless Coverage & Capacity, Telecommunications
Revenue Increase US$1.157 Billion (FY 2010)[1]
Operating income Increase US$45.9 Million (FY 2010)[1]
Net income Increase US$78.5 Million (FY 2010)[1]
Total assets Increase US$1.475 Billion (FY 2010)[1]
Total equity Increase US$429 Million (FY 2010)[1]
Employees 9,300 (Sept 2010)[1]
Website adc.com

ADC Telecommunications was a communications company located in Eden Prairie, Minnesota, a southwest suburb of Minneapolis. It was acquired by TE Connectivity (Tyco Electronics) in December 2010 and ceased to exist as a separate entity. It vacated its Eden Prairie location in May 2011 and moved staff and resources to other locations.

History[edit]

In 1935, Ralph Allison founded the Audio Development Company in the basement of his south Minneapolis home, inventing ADC's first product, the audiometer, an electronic device designed to test hearing. The company was later renamed to ADC Telecommunications, Inc.

Two years later, fellow engineer Walt Lehnert joined Allison, and together they diversified the company's product line to include amplifiers and transformers for the broadcast industry. By 1942, the company had designed a sophisticated audio system for the University of Minnesota, and the resulting jacks, plugs, patch cords and jackfields became the cornerstones for ADC's later entry into telecommunications.

In 1949, ADC sold its audiometer product line and Ralph Allison left the company to form a new business in California. ADC diversified and focused its efforts in the area of transformers and filters for power lines, military electronics, telephone jacks and plugs. In 1961, ADC merged with Magnetic Controls Company, a manufacturer of power supplies and magnetic amplifiers with strong ties to the U.S. space program. The resulting company, ADC Magnetic Controls, had a decade of mixed success. Although transformer sales boomed during the 1960s, other new product initiatives failed to materialize. Perhaps the most significant product innovation during this period was the bantam jack, a miniaturized component that eventually became the standard for telephone circuit access and patching. Building on its growing sales of jacks and plugs in the early 1970s, ADC introduced prewired, connectorized jackfields, wired assemblies and test equipment for telephone operating companies. By 1974 the company was on solid ground, and by 1976, ADC had become the largest independent supplier of test boards in the United States.

Former ADC headquarters complex in Eden Prairie, MN, USA. Now occupied by Optum Health

ADC grew in 1983, when AT&T was ordered to deregulate by the federal government. By establishing the seven Regional Bell Operating Company (RBOC) carriers as independent entities, the U.S. market for telecommunications expanded by 90 percent. ADC became a supplier for the RBOCs.

ADC embarked on some acquisitions in the early 1990s, attempting to move "up the stack" in the datacom field by acquiring companies that manufactured datacom equipment. However, their ability to find synergies between these companies proved limited and eventually ADC was forced to move away from a hardware-only strategy, broadening out into software. This effort resulted in limited success as well, and happening about the same time as the dot-com bubble burst, caused ADC stock to plummet. Despite these ups and downs, ADC continued to survive and on July 13, 2010, the company released this announcement: "Tyco Electronics (NYSE: TEL) and ADC (Nasdaq: ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics' Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world."[2]

The acquisition of ADC by Tyco Electronics was completed on December 9, 2010 [3][4]

Corporate acquisitions[edit]

In 1993, ADC acquired Fibermux Corp., a manufacturer of LAN Hubs and Data Multiplexers, later merging the Fibermux division with the Kentrox subsidiary. ADC sold Kentrox to the private equity firm Platinum Equity, LLC in 2001.[5] ADC also acquired American Lightwave Systems, a manufacturer of uncompressed video transport equipment for telecom carriers. This division was later sold to C-COR Electronics. In 1996, ADCT merged with ITS (Information Transmission Systems) but has since sold it off. In 1999 ADC acquired Saville later sold to Intec Telecom Systems. In FY2005, ADC acquired Fiber Optic Network Solutions (FONS) to expand its FTTX offerings and OpenCell to enhance its wireless coverage and capacity offerings.[6] In 2007 ADC acquired LGC Wireless to expand its portfolio of wireless coverage and capacity products and services.[7] In 2008, ADC expanded its market presence and manufacturing capacity in China with the acquisition of Century Man Communications.[8]

Businesses[edit]

ADC's customers were served regionally by businesses focused on telecommunications, wireless, cable, and enterprise networks. Business units within ADC developing products and services included Global Connectivity Solutions, Network Solutions and Professional Services. These organizations service all types of networks through a combination of equipment, solutions and services.

Customers[edit]

Customers included local and long distance telephone companies, cable television operators, Internet/data communications providers, wireless service providers, private network operators, and broadcast television operators. Examples of this vast customer base include AT&T, Bank of England, Bloomberg, British Telecom, China Telecom, Cingular, CitiBank, Comcast, Dell, Deutsche Telekom, Ford, GlaxoSmithKline, Hong Kong Telecom, HSBC, JPMorgan Chase, Mayo Clinic, Morgan Stanley, NBC, Sprint Nextel, Reliance Infocom (India), Rolls-Royce, Qwest, T-Mobile, Seagrams, Verizon, and many others.

References[edit]

External links[edit]