Marlin Equity Partners purchased Tellabs (Nasdaq: TLAB) for about $891 million in cash, signaling a new era for the telecom equipment maker which has struggled with quarterly revenue declines and ongoing losses.
The global investment firm will acquire all of Tellabs' outstanding shares for $2.45 per share in cash. It said the price represents a premium of 4.3 percent over the closing share price on Oct. 18 and 13.3 percent over the over the 180-day volume-weighted average closing share price as of the same day.
When the tender offer closes, Marlin said that "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."
After meeting certain conditions, including the tender of a majority of the outstanding shares of Tellabs common stock and the expiration of a termination period, Marlin expects to close the deal by Nov. 1.
The transaction has been approved by Tellabs' board of directors. Likewise, Michael J. Birck, Tellabs' co-founder and second-largest stockholder, told the vendor he supports the purchase.
Vince Tobkin, chairman of the board for Tellabs, said in a release announcing its agreement with Marlin Equity that "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."
Tellabs has struggled with quarterly revenue declines and ongoing losses. During the second quarter, the company reported revenue declined year-over-year to $212 million, down from $288 million.
At the same time, the vendor saw the exit of two CFOs and had to cut costs by laying off staff and scrapping product lines such as the 9200 routing platform.
Tellabs is not the only optical-related company that Marlin has purchased. Earlier this year, it launched Coriant Networks, a new company built through its purchase of Nokia Siemens Networks' optical business and Sycamore Networks.
- see the release
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