Massive Telecom Deal Has Indiana Connection
An Illinois-based telecommunications company, co-founded by a prominent businessman with strong Indiana ties, is set to be acquired for nearly $900 million. Former Purdue University Trustee Michael Birck, who grew up in a small west-central Indiana community, helped launch Tellabs Inc. (Nasdaq: TLAB) nearly four decades ago. The company has agreed to be sold to Marlin Equity Partners in California. Birck retired as chairman of Tellabs' board in April.
You can view a full profile on Birck's contributions to the company by clicking here.
October 21, 2013
NAPERVILLE, Ill. – Tellabs (NASDAQ: TLAB) today announced that it has entered into a definitive merger agreement with entities affiliated with Marlin Equity Partners (“Marlin”), which provides that Marlin entities will acquire all of the outstanding shares of Tellabs for $2.45 per share in cash.
The price per share represents a premium of 4.3 percent over the closing share price on October 18, 2013, and 13.3 percent over the 180-day volume-weighted average closing share price as of the same day. In addition, the offer represents a premium of 28.9 percent over the current 52-week-low closing share price, which occurred on April 17, 2013. The transaction value represents a total equity value of approximately $891 million on a fully diluted basis.
Under the terms of the merger agreement, an affiliate of Marlin is required to commence a tender offer to acquire all outstanding shares of Tellabs' outstanding common stock for $2.45 per share in cash no later than November 1, 2013. The merger agreement provides that, promptly after the closing of the tender offer, any shares not tendered in the tender offer (other than shares for which appraisal is properly sought under applicable law) will be acquired in a second-step merger at the same cash price as paid in the tender offer.
Closing of the tender offer and closing of the merger are subject to certain conditions, including the tender of at least a majority of the outstanding shares of Tellabs common stock (on a fully-diluted basis) and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close in the fourth quarter of 2013. The transaction is not subject to a financing condition.
The Tellabs Board of Directors has unanimously approved the transaction. In addition, Michael J. Birck, Tellabs's co-founder and second-largest stockholder, has communicated to Tellabs that he supports the transaction.
“This transaction will deliver to Tellabs stockholders certainty of value and liquidity, immediately upon closing,” said Vince Tobkin, Tellabs chairman. “Tellabs' Board of Directors arrived at the decision to enter into a transaction with Marlin after a thorough review of Tellabs' strategic alternatives and after more than 30 potential buyers, both strategic parties and financial sponsors, were contacted as part of a competitive bidding process.
“This move begins an exciting new chapter for Tellabs, our customers, partners and employees. We believe the transaction will enable us to invest in key technologies for future products, and become even more competitive as we help our customers succeed,” Tobkin added.
Lead activist Dialectic Capital Management said, “We are pleased that the Board has evaluated all alternatives and are choosing what they feel is the best option for all stakeholders.”
“We are excited to back the Tellabs team and we view Tellabs' business as an ideal opportunity to capitalize on the growth in the telecom network equipment sector,” said Nick Kaiser, partner at Marlin. “We are committed to extending Tellabs' market leadership by continuing to make significant investments in research and development, and in providing a superior customer experience.”
Goldman, Sachs & Co. is acting as financial advisor, and Sidley Austin LLP is acting as legal counsel, to Tellabs. Credit Suisse and Evercore are acting as financial advisors and Schulte Roth & Zabel LLP is acting as legal counsel to Marlin.
About Marlin Equity Partners – Marlin Equity Partners is a global investment firm with over $2.6 billion of capital under management. The firm is focused on providing corporate parents, shareholders and other stakeholders with tailored solutions that meet their business and liquidity needs. Marlin Equity invests in businesses across multiple industries where its capital base, industry relationships and extensive network of operational resources significantly strengthens a company's outlook and enhances value. Since its inception, Marlin Equity, through its group of funds and related companies, has successfully completed over 65 acquisitions. The firm is headquartered in Los Angeles, California with an additional office in London. For more information, please visit www.marlinequity.com
Tellabs innovations advance smart networks and help its customers succeed. That's why 80 percent of the top global communications service providers and 40 of the Fortune 100 companies choose its mobile backhaul, packet optical, Optical LAN and services solutions. Tellabs helps them get ahead by adding revenue, reducing expenses and optimizing networks.
Tellabs (Nasdaq: TLAB) is part of the Ocean Tomo 300 Patent Index and several corporate responsibility indexes including the Maplecroft Climate Innovation Index, FTSE4Good and eight FTSE KLD indexes. www.tellabs.com