Private equity firm Avista Capital Partners has launched a US$253m bid for remote monitoring solutions specialist Telular Corporation.
The sponsor is offering Telular shareholders US$12.61 per share in cash, a 31% premium to the closing share price on…
Private equity firm Avista Capital Partners has launched a US$253m bid for remote monitoring solutions specialist Telular Corporation.
The sponsor is offering Telular shareholders US$12.61 per share in cash, a 31% premium to the closing share price on 26 April, the last full trading day before the announcement, and a 27% premium to the 60-day average share price. As part of the consideration, Avista will also assume Telular’s US$18.5m of net debt.
Avista added that the proposed acquisition has fully committed financing from SunTrust Robinson Humphrey and is currently expected to close within 50-75 days.
The board of directors of Telular has unanimously approved the takeover offer and recommends that Telular shareholders tender their shares in the forthcoming tender offer. Avista requires at least two-thirds of Telular’s outstanding shares of common stock to be tendered.
Under the definitive agreement, immediately following the completion of the tender offer the two parties can also effect, subject to customary conditions, a “short-form” merger without a meeting of Telular’s shareholders. This merger would result in all shares not tendered being converted into the right to receive US$12.61 per share net in cash, without interest.
Commenting on the proposed acquisition, Joe Beatty, chief executive officer of Telular said: “This announcement represents a very positive event for our shareholders. We are proud of our nineteen years as a public company, during which we believe we have served our shareholders well, and the partnership with Avista will allow the company to expand and build on its success to date.”
Brendan Scollans, partner at Avista added, “Telular’s strong position in three rapidly growing machine-to-machine communications end markets and compelling recurring revenue business model make it a highly attractive platform for Avista. We are looking forward to working with Telular’s talented management team to drive the next phase of the company’s growth both organically and through acquisitions.”
Beatty will remain as president and CEO until the closing of the proposed acquisition. At the beginning of the year, Telular announced that Beatty was to leave the company in May due to personal reasons.
Under the definitive agreement, Telular may solicit superior proposals from third parties through 29 May 2013.
The takeover announcement comes after a period of increased trading activity in Telular’s shares, with a number of hedge funds such as Renaissance Technologies and T2 Partners upping their position in the company.
SunTrust Robinson Humphrey is financial adviser to Avista, while Kirkland & Ellis is serving as the sponsor’s legal adviser. Oppenheimer & Co. is acting as exclusive financial adviser and Kelley Drye & Warren and Covington & Burling are acting as legal advisers to Telular.