Telular Corp. (WRLS: Quote), a provider of remote monitoring and asset tracking solutions, has agreed to be acquired by private equity firm Avista Capital Partners in a transaction valued at $253 million, including debt, the two companies said Monday. Shares of Telular are currently gaining 30 percent in the regular trading session.
Under the deal, Avista Capital will acquire Chicago, Illinois-based Telular for $12.61 per share net in cash and about $18.5 million in assumed net debt. The purchase price represents a 31 percent premium to Telular's closing stock price of $9.63 on Friday, April 26, 2013, the last full trading day before today's announcement.
Avista Capital Partners, a private equity firm with over $5 billion under management, has offices in New York, Houston and London.
Telular's board of directors has unanimously approved the proposed acquisition by Avista and has recommended that the company's shareholders tender their shares in the forthcoming tender offer.
Joe Beatty, chief executive officer of Telular said, "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. For our customers, we will continue to deliver the best remote wireless monitoring and tracking solutions available in the markets we serve."
Brendan Scollans, Partner at Avista, said, "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."
Telular said Beatty will remain as its president and CEO until the closing of the proposed acquisition. The transaction has fully committed financing and is currently expected to close within 50 to 75 days.
Under the terms of the deal, an entity controlled by Avista will promptly commence a tender offer to buy any or all of the outstanding shares of Telular common stock for $12.61 per share in cash. The deal also provides for the parties to effect a "short-form" merger without a meeting of Telular's shareholders immediately following the completion of the tender offer.
As per the deal, Telular may solicit superior offers from third parties through May 29. The company's board has been prohibited from declaring any dividends prior to the closing of the proposed acquisition.
Telular plans to release its fiscal second-quarter earnings after the market closes on Thursday, May 2.
Oppenheimer & Co. Inc. is acting as Telular's exclusive financial advisor, while Kelley Drye & Warren LLP and Covington & Burling LLP are acting as its legal advisors. For Avista, Kirkland & Ellis LLP is serving as its legal advisor, while SunTrust Robinson Humphrey, Inc. is acting as its financial advisor and has provided the debt financing commitment for the acquisition.
In Monday's regular session, WRLS is trading at $12.60, up $2.97 or 30.84 percent on a volume of 338,751 shares.
by RTT Staff Writer
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