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PE Shop, Singaporean Wealth Fund Drop $2.9B on Neustar

Cloud-based information services provider and data registry operator Neustar Inc. said Wednesday that an investment group led by private equity shop Golden Gate Capital and including Singapore’s sovereign wealth fund would take it private in a $2.9 billion deal, including debt.

The company’s long term strategy has been to improve and expand its data offerings, it said, and this proposed sale to Golden Gate and GIC, which would be the minority owner, gives the company more freedom to aggressively pursue that strategy.

“We believe this transaction will enable us to continue to execute against our strategy and strengthen our market position as a leader in marketing, risk, security and communication solutions,” Lisa Hook, Neustar’s president and CEO, said in a statement. “Golden Gate Capital and GIC offered us a compelling opportunity to continue to invest and pursue long-term growth with operational flexibility, and we look forward to working with these two sophisticated investors.”

Under the deal’s terms, the investment group will pay Neustar shareholders $33.50 per share for their holdings, corresponding with an equity value of $1.83 billion, a 21.2 percent premium to its Tuesday closing price and a 45 percent premium to its closing price on Nov. 11 — the day Golden Gate disclosed a position in the company.

Financing for the investor group will come from Bank of America Merrill Lynch, UBS Investment Bank, Jeffries Finance LLC and Angel Island Capital, which committed more than $1.7 billion for the transaction, according to filings with the U.S. Securities and Exchange Commission.

Neustar will have a 30-day period to shop for a superior offer from a separate party, however, it is not certain the company will find another suitor, according to the statement.

The deal is expected to close in the third quarter of 2017 and it is subject to both shareholder and regulatory approvals, along with other customary closing conditions.

Shares of Neustar closed trading on New York Stock Exchange Wednesday at $33.45 a piece, a near-21 percent increase from Tuesday’s closing price. Over the past month, since the disclosure of Golden Gate’s stake, the company has seen its equity value increase by 47.7 percent or nearly-$11 per share.

JPMorgan Securities LLC was Neustar’s financial adviser, while Goodwin Procter LLP and Wiley Rein LLP were its legal counsel. The Goodwin Procter team included Stuart Cable, Lisa Haddad, Blake Liggio and Jennifer Bralower. The Wiley Rein team included partners Brett A. Shumate and Thomas J. Navin.

BofA Merrill Lynch was Golden Gate’s financial adviser, and Kirkland & Ellis LLP and Nob Hill Law Group were its legal counsel. The Kirkland team included partners Samantha Good, Jeremy Veit and Paula Riedel, along with associates Brian Haroldson, Nichole Lopez-Tackett, Jean Lee and James Parkinson. Shearman & Sterling LLP partner Jonathan DeSantis counseled BofA Merrill Lynch. A Sidley Austin LLP team led by partner Asi Kirmayer was GIC’s legal counsel on the deal.