telecommunications

Genstar Capital Completes Sale of ConvergeOne

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Genstar Capital has completed the previously announced sale of its portfolio company ConvergeOne,  an independent provider of communications solutions and managed services to enterprises globally, to Clearlake Capital.  Genstar first invested in ConvergeOne in May 2007.

ConvergeOne is one of the largest providers of business communications and data services in the United States. Services include converged networks and unified communication solutions, call centers, system design, implementation, integration, maintenance, data storage and archiving and other professional services primarily for mid-sized and enterprise businesses.  ConvergeOne has over 4,100 customers, including 46% of the Fortune 100 companies, operating in virtually every industry, including the financial, technology & communications, healthcare, and energy sectors.  The company is headquartered near Minneapolis in Eagan, MN (www.converge-one.com).

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. Sectors of interest include financial services, software, healthcare, and industrial technology industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

“We are pleased to have built this strong platform and positioned it for continued growth.  We continue to evaluate a robust pipeline of investments in the software sector and look forward to applying our expertise in new opportunities to transform businesses into industry leaders,” said Mark Hanson, Genstar Operating Partner.

Clearlake invests in special situations such as corporate divestitures, recapitalizations, buyouts, restructurings, turnarounds and minority equity investments. Sectors of interest include business services; communication; consumer products and retail; defense and public safety; energy and power; healthcare; industrials; media; and technology. Clearlake currently manages approximately $1.4 billion of equity capital. The firm was founded in 2006 and is headquartered in New York (www.clearlakecapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-19-14

Birch Equity Partners Invests in Tempo Telecom

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Birch Equity Partners has closed its first transaction through an investment in Tempo Telecom, a provider of prepaid and discount telecommunications services.

“Birch Equity Partners’ decision to invest in Tempo was an easy one,” said Vincent Oddo, Managing Partner. “We observed the historical growth and the excitement in the marketplace for prepaid and Lifeline services and knew this was an expansion-stage business that had great potential.”

Tempo Telecom is a provider of prepaid and discount communications services for either traditional landlines or wireless. The company offers discounts to consumers through the FCC-sponsored Lifeline program (through the Universal Service Fund) which provides a discount on phone service for qualifying low-income consumers. Tempo is based in Kansas City, MO and was founded in 1996 (www.mytempo.com).

“In addition to growth capital, Birch Equity will also be providing management expertise and several back-office and call center services to Tempo,” said Mr. Oddo. “We believe this multi-faceted approach to supporting a growth-stage business like Tempo will allow the company to expand exponentially over the next several years, and beyond.”

Birch Equity Partners was launched in January 2014 by Holcombe Green, Jr., Vincent Oddo and Dr. R. Kirby Godsey. The firm makes minority and control investments of $1 million to $10 million in companies with $5 million to $50 million of revenue. Sectors of interest include business services, consumer services, education, telecom and broadband services, entertainment, internet and media, financial services, healthcare, information services, and technology. Birch Equity is based in Atlanta (www.birchequity.com).

Mr. Oddo has spent his entire 30-year career working with companies in the telecommunications and technology industries. He also serves as the President and Chief Executive Officer of Birch Communications, an IP-based communications and cloud services provider headquartered in Atlanta.

Commenting on the launch of Birch last month Mr. Oddo said, “Birch Equity Partners has been a vision of ours for some time and we are excited to finally get started. Our success growing and operating Birch Communications over the past 18 years has enabled us to develop a unique set of assets and resources which we think will be very valuable to small and mid-sized expansion-stage businesses that are seeking capital as well as practical management expertise and a unique set of back-office capabilities.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-25-14

Marlin Equity Partners Acquires Tellabs

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Tellabs has entered into an agreement to be acquired by Marlin Equity Partners for $2.45 per share in cash which equates to a total equity value of approximately $891 million. The transaction is expected to close in the fourth quarter of 2013 and is not subject to a financing condition.

“We are excited to back the Tellabs team and we view Tellabs’ business as an ideal opportunity to capitalize on the growth in the telecom network equipment sector,” said Nick Kaiser, partner at Marlin. “We are committed to extending Tellabs’ market leadership by continuing to make significant investments in research and development, and in providing a superior customer experience.”

The Tellabs Board of Directors has unanimously approved the transaction. In addition, Michael Birck, Tellabs’s co-founder and second-largest stockholder, has communicated to Tellabs that he supports the transaction.

Tellabs (NASDAQ: TLAB) designs, develops and supports telecommunications networking products. The company serves telecommunications service providers (including mobile wireless communication companies), independent operating companies, multiple-system operator cable companies, enterprises and government agencies. Revenues in 2012 were approximately $1 billion. Tellabs was founded in 1975 and is headquartered near Chicago in Naperville, IL (www.telllabs.com).

Marlin Equity Partners invests in businesses that have revenues of $20 million to $1 billion and that are in the process of undergoing varying degrees of operational, financial or market-driven change. Sectors of interest include technology, healthcare, consumer products and services, business services, manufacturing, aerospace & defense, distribution & logistics, and media. The firm has $2.6 billion of capital under management. Marlin is headquartered in Los Angeles with an additional office in London (www.marlinequity.com).

Goldman, Sachs & Co. is acting as financial advisor to Tellabs. Credit Suisse and Evercore are acting as financial advisors to Marlin.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-22-13