TNS, Inc. to Acquire Communication Services Group from VeriSign, Inc. for $230 Million in Cash
TNS, Inc. (NYSE: TNS), a leading provider of business-critical, cost-effective data communications services for transaction-oriented applications, has entered into a definitive agreement with VeriSign, Inc. (Nasdaq: VRSN) to acquire its Communication Services Group (“CSG”) for $230 million in cash.
The transaction is expected to be accretive to TNS’ 2009 earnings upon close. The boards of directors of both companies have approved the acquisition which is expected to close within the next 60 days, subject to customary regulatory approvals and the successful completion of
financing.
CSG operates one of the largest un-affiliated SS7 (Signaling System No. 7) networks in the United States, is a leading provider of intelligent database services, such as caller ID, to the telecommunications industry, and provides roaming and clearing services to the wireless telecommunications industry. TNS intends to integrate the acquired business into the Telecommunication Services Division (TSD). With this acquisition, TNS will more effectively scale its existing SS7 network and database offerings, add a group of blue chip customers,
deepen the TSD management team and significantly augment product development within
TSD.
Henry H. Graham, Jr., CEO, commented, “This transaction is a significant, deliberate step that provides scale and creates strategic, financial, and operational benefits for TNS. As a result of this combination, TSD will provide a more robust set of network and database offerings to its customer base and become a participant in the wireless roaming and clearing market. In addition, the CSG development group has a proven ability to bring new products to market, and will put TSD at the forefront of developing the next generation of products and services to the telecommunications industry. In all, this combination offers us a great strategic and financial fit, a best-of-breed product line and a strengthened competitive position, reinforcing TNS as the gold standard of value-added connectivity in all of our divisions.”
The acquisition is planned to be financed through a combination of new financing of up to $250 million and cash on hand. TNS will also be required to amend its 2007 Credit Facility to allow for the acquisition and new financing. Dennis L. Randolph, Jr., Executive Vice President and CFO, commented, “This strategic acquisition combines assets that share similar recurring revenue and strong cash flow characteristics. It represents an efficient use of capital with conservative use of leverage. We are confident in the proposed financing structure.”
SunTrust Robinson Humphrey is serving as financial advisor to TNS with respect to the transaction and sole bookrunner and lead agent with respect to the financing. TNS is receiving legal advice from Kirkland & Ellis LLP.
