Internet services provider VeriSign sells off unit for $230 million
04 Mar 2009
Internet infrastructure services provider VeriSign, Inc. today announced the sale of its Communication Services Group to Reston, Virginia-based TNS, Inc. in a cash transaction of $230 million.
The transaction is expected to be accretive to TNS' 2009 earnings upon close. The acquisition is expected to close within the next 60 days, subject to customary regulatory approvals and the successful completion of financing. TNS plans to fund the acquisition through a combination of new financing of up to $250 million and cash on hand. It will also be required to amend its 2007 credit facility to allow for the acquisition and new financing.
Since late 2007, VeriSign has been trying to spin-off its slower growing units, but has been struggling to find buyers since the economic slowdown worsened. Communication services are one of the three big bundles left to be sold for VeriSign. The unit provides intelligent database services, such as caller ID, to the telecommunications industry.
"The sale of the Communications Services Group is another important step toward our divestiture goals as we continue our commitment and focus on our core businesses in Internet infrastructure," said Jim Bidzos, executive chairman of the board of directors, and CEO on an interim basis of VeriSign.
SunTrust Robinson Humphrey is serving as financial advisor to TNS with respect to the transaction and sole book runner and lead agent with respect to the financing. Morgan Stanley & Co. is serving as financial advisor to VeriSign with respect to the transaction. VeriSign is receiving legal advice from Cleary Gottlieb Steen & Hamilton LLP.
VeriSign shares closed at $18.96 Monday on NASDAQ. TNS stock closed at $6.28 on the New York Stock Exchange.
