By the time it spun off from General Instrument (now part of Motorola (NYSE:MOT - News)) a decade ago, it had become a leader in coaxial TV connections for the "last mile," or final link, to the customer.

CommScope (NYSE:CTV - News) doubled its size three years ago when it bought Avaya's (NYSE:AV - News) Connectivity Solutions unit. That gave it a leading role in cables for business enterprises as well.

Now CommScope is about to enter a new and bigger chapter in its life. It will buy wireless connectivity specialist Andrew (NasdaqGS:ANDW - News), a firm with more than $2 billion in revenue last year, compared with CommScope's $1.6 billion.

The $2.6 billion deal was announced June 27, about a year after Andrew spurned a lower buyout offer. It should close by the end of the year.

Andrew's Price

CommScope will pay $15 each for Andrew's shares, up from last summer's $9.50 bid. Despite the higher price, analysts are gushing over the deal.

"It gives them significantly more penetration into the wireless space, where they had a relatively minor presence in the past," said Eric Buck of Brean Murray Carret. "It's going to be extremely positive for Comm-Scope. Virtually every wireless carrier is buying Andrew's products on a worldwide basis."

Andrew is the dominant player in connecting antennas and radios on wireless systems. It also sells gear for wireless towers.

After further study, Buck raised his forecasts. He wrote to clients that his "initial enthusiasm was too conservative."

His new model has the combined company's total sales growing 60% to $6.04 billion by 2011.

Simon Leopold of Morgan Keegan & Co. says he expects CommScope to raise its full-year forecast when it reports second-quarter results July 30.

Management wasn't available for comment. But the firm already raised its second-quarter forecast when it unveiled the Andrew deal.

The high end of the sales range stayed at $510 million, but the low end rose to $500 million from $490 million. The firm pushed up its operating margin view by half a percentage point, to the 15% to 16% range.

But CommScope didn't change its full-year forecast: $1.84 billion to $1.89 billion in revenue and margin of 13.5% to 14.5%.

Management expects the Andrew merger to save $50 million to $60 million before tax in the first year, and another $40 million the second year.

"Restructuring and synergies (from the merger) can lead to meaningful accretion for 2008 earnings," said Leopold. He raised his forecast also, based on 26% accretion.

Most Wall Street analysts aren't factoring all the possible synergies in their views, however. In a poll by Thomson Financial, they see 2008 profit rising only 9% over 2007. That contrasts to an expected 59% jump this year over last, to $2.68 a share.

Some of the trouble comes from volatile prices of raw materials, such as copper and plastics. But analysts say CommScope has kept that from eating too much into profits.

"They've been disciplined about adjusting prices," Leopold said. "But it's always an issue."

The expected slowdown in profit growth, at least initially, has more to do with merger-related debt costs and Andrew's lower operating margins.

But CommScope plans to improve Andrew's margins over time. Execs have said they would look at selling some divisions within a year after the buyout closes. Analysts were left to guess which ones.

Buck wrote in a note that the sale of Andrew's base station subsystems line could draw $500 million or more in cash. That unit doesn't fit neatly into CommScope's business plan, he said.

Leopold says that selling Andrew's money-losing satellite communications unit would also help margins.

Meanwhile, CommScope's three core market segments are growing in double digits even without Andrew on its team.

"Various upgrade cycles are going on in each of their customer markets, and they are benefiting from those trends," Leopold said.

First-quarter sales in the largest unit -- enterprise -- rose 16.7% over the prior year to $200.9 million. Broadband, which includes cable TV, jumped 17.6% to $148 million.

Triple Play

CommScope cited cable operators' growing investments in their networks to support the "triple play" of video, data and voice services.

The smallest unit, the wireless and wireline carrier business, saw the greatest jump -- 59.2% to $87 million. Analysts tie much of that rise to large metal field cabinets AT&T (NYSE:T - News) bought for its major fiber-to-curb upgrade program, called Lightspeed. The cabinets hold telecom gear.

Some say the Lightspeed project is slowing down, however.

Buck says CommScope will likely try to boost the cabinets business by selling the products to Andrew's customers. Other cross-selling opportunities are likely, analysts say.