RMR/Automation Drive Avista's $253M Acquisition of Telular
Telguard’s parent company, Telular Corporation, Chicago, and Avista Capital Partners, New York, jointly announced they entered into a definitive agreement providing for the acquisition of Telular for $12.61 per share net in cash and approximately $18.5 million in assumed net debt, or approximately $253 million in total consideration.
The sale indicates a growing interest in home automation and its recurring monthly revenue opportunities, a clear bonus for investors like Avista. As 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.
“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,” he added.
Earlier this year at ISC West, Telguard introduced its life safety communications offering, Telguard HomeControl, which is combined with the iControl Networks OpenHome software platform to allow dealers to offer cellular connectivity, interactive services and life style management, all in the single Go!Control-inspired user interface. It was one more offering bringing the security industry and the “smart home” closer together — and part of another multi-million dollar home automation-related acquisition, as earlier this year, Linear, LLC, Carlsbad, Calif., a subsidiary of Nortek, Inc., spent $135 millionto acquire 2GIG Technologies, manufacturer of Go!Control. The acquisition of 2GIG was announced by Nortek in February 2013.
Telguard’s purchase price represents a 31 percent premium to the closing share price on April 26, 2013, the last full trading day before the announcement, and a 27 percent premium to the 60-day average share price.
The proposed acquisition has fully committed financing and is currently expected to close within 50-75 days, the companies stated.
“This announcement represents a very positive event for our shareholders,” said Joe Beatty, chief executive officer (CEO) of Telular. “We are proud of our 19 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.”
The board of directors of Telular unanimously approved the proposed acquisition by Avista. Beatty will remain as president and CEO until the closing of the proposed acquisition.
Following the April announcement, on May 13 Avista Capital Partners reported that ACP Tower Merger Sub Inc. had commenced the cash tender offer for all outstanding shares of common stock of Telular Corp. at the price of $12.61 net per share, without interest and less applicable withholding taxes thereon.
The tender offer was being made in connection with the agreement and plan of merger.
The Telular board of directors unanimously approved the proposed acquisition by Avista Capital Partners and recommended that Telular's stockholders accept the offer and tender their shares to purchaser in the tender offer.
The tender offer and withdrawal rights are scheduled to expire at the end of the day on Friday, June 7, 2013, unless the tender offer is extended or earlier terminated.
Oppenheimer & Co. Inc. is acting as exclusive financial advisor and Kelley Drye & Warren LLP and Covington & Burling LLP are acting as legal advisors to Telular. Kirkland & Ellis LLP is serving as legal advisor to Avista. SunTrust Robinson Humphrey Inc. is acting as financial advisor to Avista and has provided the debt financing commitment for the acquisition.
For information on Telgaurd’s automation offerings, visit www.telguard.com.