Neustar to Be Acquired by Golden Gate Capital

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Shares of Neustar Inc. (NYSE: NSR) saw a solid gain on Wednesday after the company announced that it would be acquired by a private investment group led by Golden Gate Capital. The deal is valued up to $2.9 billion, including debt to be refinanced. The board of directors unanimously approved the deal.

Under the terms of the transaction, Golden Gate will pay $33.50 per share in cash, representing a premium of about 21% from Tuesday’s closing price ($27.65) and a premium of nearly 34% from the 50-day moving average ($25.03).

The transaction, which is expected to close no later than the end of the third calendar quarter of 2017, is subject to approval by Neustar’s shareholders, regulatory approvals and other customary closing conditions. The proposal also included a shop-around agreement in which Neustar can solicit bids from third parties for 30 days.

Lisa Hook, Neustar’s president and CEO, commented:

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. 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. Importantly, customers, employees and partners will continue to benefit as we execute against our strategy.

Rishi Chandna, a managing director with Golden Gate Capital, added:

We strongly believe in the Company’s strategic direction and have been very impressed with the team’s ability to transform the business into both a trusted, neutral provider to the telecom industry and a leading information services provider. We look forward to partnering with the Neustar team to achieve its strategic objectives, make the Company’s competitive advantages even more compelling and drive value for all of Neustar’s stakeholders.

Shares of Neustar were trading up about 20% at $33.35 on Wednesday, with a consensus analyst price target of $26.67 and a 52-week trading range of $20.00 to $33.50.