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Two east coast-based buyout firms, Thomas H. Lee Partners and Quadrangle, agreed on Wednesday to buy Omaha-based West Corp, a leading outsourced telecommunications software and services provider, for $4.1bn including debt.
Under the terms of the agreement, all shareholders excluding founders, Gary and Mary West, will receive $48.75 a share in cash, a 13 per cent premium over the company’s closing price on Tuesday and an approximate 16 per cent premium over the trailing five day average.
The Wests, who founded the company in the mid 1980s and who hold a 56 percent stake, will receive $42.83 per share in cash for 85 per cent of their current holdings and the remaining 15 per cent will be converted into shares of the new company.
West shares rose $5.46 to $48.61 in early composite trading on the Nasdaq Stock Market on Wednesday.
The company, which was founded in 1986, has 29,000 employees based in North America, Europe and Asia, provides a range of services for companies like AT&T and Microsoft and government agencies across the world.
These services include customer acquisition, customer care, automated voice services, emergency communications, conferencing and accounts receivable management. It has boosted net income from $69m in 2002 to $150m last year.
The transaction is expected to close in the fourth quarter. The deal includes a $93m breakup fee if it fails to complete.
■ ADC Telecommunications, a US-based telecommunications networking equipment manufacturer, agreed to buy Andrew Corp for about $2bn in stock continuing the wave on consolidation sweeping through the telecommunications equipment market.
ADC Telecommunications currently focuses on fixed line technology while Andrew’s mainly sells wireless infrastructure products. The deal will position the combined company to take greater advantage of network upgrades over the next few years by both fixed line and wireless carriers.
Andrew’s shareholders will receive 0.57 of an ADC share, or an equivalent of $12.76 a share, for each share they own representing a 30 per cent premium over Andrew’s closing share price on Tuesday. After completion, ADC shareholders will own 56 per cent of the combined company with Andrew’s shareholder holding the rest.
The deal, which is expected to close in four to six months, will more than double Minnesota- based ADC’s annual sales to around $3.3bn and create a company with 20,000 employees worldwide. Shares of ADC fell $3.91, or 18 percent, to $18.47 in morning trading on the Nasdaq Stock Market while Andrew’s shares rose 4.9 percent to $10.71.