Tellabs To Be Taken Private By Marlin Equity Partners In $891 Mln Cash Deal

(RTTNews) - Telecom equipment maker Tellabs (TLAB) agreed Monday to be taken private by Marlin Equity Partners for $2.45 per share in an all-cash deal valued at about $891 million. The deal, which has the unanimous approval of Tellabs directors, is expected to close in the fourth quarter.

"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," Tellabs Chairman Vince Tobkin said in a statement.

The offer price represents a premium of 4.3 percent over Tellabs closing share price of $3.35 on Friday. The stock is currently surging nearly 6 percent to indicate that shareholders are expecting a higher premium.

The deal was struck with Marlin after Tellabs' directors reviewed strategic alternatives followed by a competitive bidding process that included more than 30 potential buyers, both strategic parties and financial sponsors.

Tellabs noted that the deal will deliver to its stockholders certainty of value and liquidity, immediately upon closing.

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."

The closure of the deal is primarily subject to the tendering of at least a majority of the outstanding shares of Tellabs common stock to the offer. Tellabs co-founder and second-largest shareholder, Michael Birck, has expressed his willingness to support the deal. The deal is not subject to a financing condition.

Under the terms, an affiliate of Marlin will commence a tender offer to acquire all outstanding shares of Tellabs for $2.45 per share in cash no later than November 1. After crossing the majority mark, any shares not tendered will be acquired in a second-step merger at the same cash price.

"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. 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," said Nick Kaiser, partner at Marlin.

Los Angeles, California-based Marlin Equity Partners is a global investment firm with over $2.6 billion of capital under management. Marlin invests in businesses across multiple industries and has successfully completed more than 70 acquisitions.

Tellabs provides mobile backhaul, packet optical, Optical LAN and services solutions to 80 percent of the top global communications service providers and 40 of the Fortune 100 companies. Tellabs' networking solutions helps network operators to boost revenue, reduce expenses and optimize networks.

TLAB closed Friday's regular trading session at $2.35, down $0.03 on a volume of 2.43 million shares.