Recently it was announced that Marling Equity Partners in Los Angeles would acquire Tellabs, a company specializing in telecom and optical networking equipment during the 1990s networking boom.  News reports indicate Marlin will pay $891 million in cash, what some call “nickels and dimes” compared to the sales Tellabs enjoyed in a single quarter during the company’s heyday.

According to a news article at Fox Business, Marlin’s buyout carries a modest premium of less than 5%.  Co-founder Michael Birck, a major shareholder, and lead activist Dialectic Capital Management backed the deal, despite the meager premium.

Tellabs, based in Naperville, IL, sold marketing services and equipment to providers of communications services.  The buyout amounts to $2.45 per share in cash that Marlin Equity Partners agreed to in the deal.  On the Friday prior to the buyout on Monday, Tellab’s stock closed at $2.35;  the $2.45 per share Marlin agreed to pay represents a 4.3% premium.

Tellabs chairman Vince Tobkin said that the buyout was agreed to after a “thorough review” of the company’s strategic alternative.  Tobkin stated that Tellabs considered over 30 strategic and financial suitors which were evaluated by the board, and that ultimately the best option for all stakeholders involved was chosen.  As of June 2013, Tellabs employed over 2,500 employees.  The network services provider generated $1.05 billion in revenue in 2012.  The deal between Marlin Equity Partners and Tellabs is expected to close in the final quarter of 2013.

The Los Angeles business merger and acquisitions attorneys at Spotora & Associates know the complexities involved when one company acquires another.  Often companies face tumultuous transitions and numerous legal complications.  From protecting shareholder interest to operational objectives and preparation of agreements, we are dedicated to making the business of mergers and acquisitions as seamless as possible.