Marlin Equity acquires Tellabs for $891 mn

Tellabs today announced that it has entered into a definitive merger agreement with entities affiliated with Marlin Equity Partners to acquire all of the outstanding shares of Tellabs for approximately $891 million.

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.

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 will be acquired in a second-step merger at the same cash price as paid in the tender offer.

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, chairman, Tellabs.

“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,” added Tobkin.

“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, 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,” added Kaiser.

Goldman Sachs is acting as financial advisor, and Sidley Austin is acting as legal counsel, to Tellabs. Credit Suisse and Evercore are acting as financial advisors and Schulte Roth & Zabel is acting as legal counsel to Marlin.

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