Private equity firm Avista Capital Partners has completed its US$273.6m acquisition of remote monitoring solutions specialist Telular Corporation.
The sponsor’s US$12.61 per share cash tender offer expired on 24 June with approximately 82% of the…
Private equity firm Avista Capital Partners has completed its US$273.6m acquisition of remote monitoring solutions specialist Telular Corporation.
The sponsor’s US$12.61 per share cash tender offer expired on 24 June with approximately 82% of the stock, just over 14.26 million shares, validly tendered.
Under the merger agreement, Avista then exercised its top-up option to take its ownership above the 90% mark and subsequently merged its acquisition vehicle with Telular.
Following the acquisition, Telular notified Nasdaq that it is to deregister from the stock exchange and as a result the trading of its shares was suspended.
The transaction took the form of a leverage buyout with Avista funding just under half of the consideration, around 47.5%, through a new credit agreement with a syndicate of banks led by SunTrust Bank.
The debt facility comprises a US$92.5m six-year senior secured first lien term loan paying an interest of 4.25% over Libor and a US$37.5m seven-year senior secured second lien term loan paying 8 % over Libor.
The banks have also agreed to provide a US$20m five-year revolving credit facility, paying 4.25% over Libor, that is currently undrawn.
Brendan Scollans, partner at Avista, said, “We are delighted to have completed this acquisition. Telular is an attractive, high growth company with a strong recurring revenue business model and leadership positions in the rapidly growing end markets of wireless security monitoring and home automation, remote asset tracking, and industrial tank monitoring.
“As a platform company, Telular gives us the opportunity to leverage its expertise and scale in the machine-to-machine sector to pursue acquisitions in the company’s current end markets as well as adjacent verticals. Avista is excited to support Telular during its next phase of growth.”
In connection with the closing, Telular’s chief executive officer Joe Beatty has stepped down with Avista Capital Partners Industry Executive Allen Yurko stepping in as interim CEO. The search for a permanent successor is currently underway and once successful Yurko will move to become chairman of the company.
Commenting on his new position, Yurko said, “I am very pleased to be joining Telular at this exciting time. In partnership with Avista, Telular will continue to pursue its plan for growth in the machine-to-machine communications sector. I look forward to working with Telular’s strong existing management team to ensure that our customers continue to receive the very best service and solutions available.”
SunTrust Robinson Humphrey is financial adviser to Avista, while Kirkland & Ellis is has served as the sponsor’s legal adviser. Oppenheimer & Co. acted as exclusive financial adviser and Kelley Drye & Warren and Covington & Burling legal advisers to Telular.
