- Transaction values Syniverse at an enterprise value of $2.85
billion
- Expected to significantly enhance balance sheet through $1.165
billion in cash proceeds to company, including a $265 million fully
committed PIPE, up to $400 million of cash from M3-Brigade
Acquisition II Corp. and a minimum commitment of $500 million from
Twilio up to maximum investment of $750 million
- Existing investors are rolling 100% of their equity in the
business, while investors through PIPE include funds and accounts
managed by Oak Hill Advisors and Brigade Capital Management
- Transaction furthers previously-announced strategic partnership
with Twilio
Syniverse, the “world’s most connected company”TM and the
premier global technology provider of mission-critical mobile
platforms for carriers and enterprises, announced today that it has
entered into a definitive merger agreement with M3-Brigade
Acquisition II Corp. (NYSE: MBAC), a publicly traded special
purpose acquisition company, which will result in Syniverse
becoming a publicly traded company. The transaction implies an
initial enterprise value for Syniverse of $2.85 billion, or an
enterprise value-to-adjusted 2022E EBITDA multiple of approximately
12.1x, and will provide Syniverse with up to $1.165 billion in cash
through a combination of equity and equity-linked capital. Upon
closing of the transaction, the publicly traded company will be
named Syniverse Technologies Corporation and its common stock will
be listed on the New York Stock Exchange under ticker “SYNV.”
Syniverse is a leading global provider of unified,
mission-critical platforms enabling seamless interoperability
across the mobile ecosystem. Syniverse’s capabilities are expected
to become increasingly valuable to its mobile carrier and
enterprise customers during the transition to 5G mobile networks,
which will accelerate growth in devices, traffic volumes, speed and
lower-latency communications. 5G networks and the messages and
applications on them require seamless and ubiquitous connectivity
and coordination. Syniverse is the only global provider of services
to bridge these technological and operational complexities.
Syniverse is also at the center of the large and growing
Communications Platform as a Service (CPaaS) sector, with both
digital native companies and large global enterprises increasingly
using Application to Person (A2P) messaging and omni-channel mobile
engagement to successfully engage, inform and transact with their
customers, partners, and employees. The current rapid growth in the
CPaaS sector is expected to accelerate as 5G networks expand and
become a significant driver of revenue growth for Syniverse.
Today’s announcement builds on the strategic partnership between
Syniverse and Twilio (NYSE: TWLO) that was announced on March 1,
2021, through which Twilio agreed to make an equity investment of
up to $750 million in Syniverse, with a minimum commitment of $500
million. In addition, as a part of this transaction, Twilio will
become a significant minority owner of Syniverse.
Syniverse intends to use the up to $1.165 billion in equity and
equity-linked capital to substantially reduce its debt, fund new
value-added products and services, advance its strategy of
investing in organic and inorganic growth, and increase its
investment in data, machine learning and artificial intelligence
technologies.
Following the closing of the merger, Syniverse will continue to
be led by Chief Executive Officer Andrew Davies and its world class
leadership team. The Carlyle Group (“Carlyle”), Syniverse’s current
majority owner, will retain all of its current investment in
Syniverse and be the largest shareholder in the newly publicly
traded company.
Commenting on today’s announcement, Andrew Davies said:
“Syniverse is at the heart of the mobile ecosystem, enabling the
seamless and safe transmission of messaging and data that fuels
mobile communications for nearly every person and device in the
world. We are at a pivotal time in our growth and this transaction
provides us with new equity capital to accelerate investment in
innovation, product quality, and breadth that will allow us and our
investors to benefit from enterprises’ and carriers’ success in
making mobile better for their customers.”
“Syniverse’s solutions are integral in the mobile-centric 5G
world, and we are pleased to be an early investor in the company’s
next chapter of growth,” said Mohsin Y. Meghji, Chairman of the
Board of Directors and Chief Executive Officer of MBAC. “With the
company’s partnership with Twilio, the new capital, and enhanced
balance sheet, Syniverse will be well-positioned to deepen its
engagement with customers in key industry verticals, more
effectively monetize the 5G revolution, and create long-term value
for shareholders.”
James Attwood, Managing Director at Carlyle and Chairman of
Syniverse said: “Today marks an exciting milestone for Syniverse
and for Carlyle’s investment in the business. We are excited to
continue to support the Company’s growth journey and look forward
to deepening our partnership with Andrew and the rest of the
leadership team as Syniverse works with Twilio, MBAC and our public
market investors to accelerate the next wave of innovation in
mobile communications.”
Transaction Overview
The business combination values Syniverse at an enterprise value
of $2.85 billion. The transaction is expected to provide up to
$1.165 billion of cash proceeds to the combined company. MBAC will
provide up to $400 million of cash held in MBAC’s trust account
from its initial public offering in March 2021, and Twilio will
make an investment of up to $750 million, with a minimum investment
of $500 million.
Further, leading institutional investors, including Oak Hill
Advisors and Brigade Capital Management, have committed to
participate in the transaction through Private Investment in Public
Equity (PIPE) commitments totaling $265 million, consisting of
$69.2 million of common stock at $10.00 per share and $195.8
million of 7.5 percent dividend convertible preferred stock, with a
conversion price of $11.50 per share. The convertible preferred
stock provides flexible capital that further strengthens
Syniverse’s balance sheet. Existing Syniverse shareholders will
roll 100% of their equity in the transaction and are expected to
own approximately 40% of the combined company at closing.
Syniverse has also obtained committed debt financing for a new
$1 billion term loan and a $165 million revolving credit facility
to be completed at the merger closing, at which time Syniverse’s
existing debt will be repaid in full. As a result of these
transactions, Syniverse’s leverage will be significantly reduced
and Net Debt to LTM Adjusted Financing EBITDA ratio will be
approximately 3.7x.
MBAC's sponsor has agreed that a portion of its equity will vest
only if the share price of the Company exceeds $12.50 per share
over a specified period in accordance with customary provisions.
This agreement will enhance alignment of the interests of MBAC’s
sponsor with the long-term value creation and performance of
Syniverse.
The Boards of Directors of both MBAC and Syniverse have
unanimously approved the proposed transaction. The transaction is
expected to close before the end of 2021, subject to approval by
MBAC stockholders, the expiration of the HSR Act waiting period and
other customary closing conditions.
Investor Conference Call Information
Syniverse and MBAC will host a joint investor conference call to
discuss the proposed transaction tomorrow, August 17, 2021 at 8:00
a.m. EDT. Interested parties may listen to the webcast at
http://public.viavid.com/index.php?id=146342. In addition, a
recording of the call will be posted to MBAC’s IR website at
https://www.m3-brigade.com/news/press-releases.
Additional information about the proposed business combination,
including a copy of the investor presentation, will be provided in
a Current Report on Form 8-K to be filed by MBAC today with the SEC
and available at www.sec.gov. The investor presentation can also be
found on Syniverse’s website at https://www.Syniverse.com and
MBAC’s website at https://www.m3-brigade.com.
Advisors
Moelis & Company LLC served as financial advisor to
Syniverse and Carlyle and joint placement agent. Syniverse obtained
committed debt financing from Barclays, Bank of America, Goldman
Sachs, Credit Suisse, Mizuho and Deutsche Bank. Debevoise &
Plimpton LLP served as legal counsel for Syniverse and Carlyle.
JP Morgan Securities LLC served as financial advisor to MBAC and
is serving as lead placement agent in the transaction. Cantor
Fitzgerald & Co. acted as a capital markets advisor for MBAC.
Wachtell, Lipton, Rosen & Katz served as legal counsel for
MBAC.
Centerview Partners LLC served as financial advisor to Twilio,
and Kirkland & Ellis LLP and DLA Piper LLP acted as legal
counsel.
About Syniverse
Syniverse powers mobile experiences for almost every person and
device on earth. The world’s largest companies and nearly all
mobile carriers rely on Syniverse’s global network to seamlessly
bridge mobile ecosystems and securely transmit data, enabling
billions of transactions, conversations and connections [daily].
Building on its 30-year history of innovation to shape the future
of communications, Syniverse is focused on harnessing the potential
of 5G to transform how businesses engage with customers and help
carriers reimagine how far they can reach.
About M3-Brigade Acquisition II Corp.
M3-Brigade Acquisition II Corp. (NYSE: MBAC) is a special
purpose acquisition company formed for the purpose of effecting a
merger, stock purchase or similar business combination with one or
more businesses. MBAC is led by key executives of M3 Partners, LP,
a leading financial advisory services firm that specializes in
assisting companies at inflection points in their growth cycle, and
Brigade Capital Management, LP, a leading global investment advisor
that was founded in 2006 to specialize in credit-focused investment
strategies and has approximately $30 billion in assets under
management.
About Twilio
Millions of developers around the world have used Twilio (NYSE:
TWLO) to unlock the magic of communications to improve any human
experience. Twilio has democratized communications channels like
voice, text, chat, video, and email by virtualizing the world’s
communications infrastructure through APIs that are simple enough
for any developer to use, yet robust enough to power the world’s
most demanding applications. By making communications a part of
every software developer’s toolkit, Twilio is enabling innovators
across every industry — from emerging leaders to the world’s
largest organizations — to reinvent how companies engage with their
customers.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction, M3-Brigade
Acquisition II Corp. (the “Company”) intends to file a preliminary
proxy statement and a definitive proxy statement with the SEC. The
Company’s stockholders and other interested persons are advised to
read, when available, the preliminary proxy statement, the
amendments thereto, and the definitive proxy statement and
documents incorporated by reference therein filed in connection
with the proposed transaction, as these materials will contain
important information about the Company, Syniverse Corporation
(“Syniverse”) and the proposed transaction. When available, the
definitive proxy statement will be mailed to the stockholders of
the Company as of a record date to be established for voting on the
proposed transaction. Stockholders will also be able to obtain
copies of the preliminary proxy statement, the definitive proxy
statement and other documents filed with the SEC that will be
incorporated by reference therein, without charge, once available,
at the SEC’s website at http://www.sec.gov, or by directing a
request to: M3-Brigade Acquisition II Corp., 1700 Broadway – 19th
Floor, New York, New York 10019.
Participants in the Solicitation
The Company and its directors and executive officers may be
deemed participants in the solicitation of proxies of the Company’s
stockholders with respect to the proposed transaction. A list of
those directors and executive officers and a description of their
interests in the Company will be filed in the proxy statement for
the proposed transaction and available at www.sec.gov. Additional
information regarding the interests of such participants will be
contained in the proxy statement for the proposed transaction when
available.
Syniverse and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
stockholders of the Company in connection with the proposed
transaction. A list of the names of such directors and executive
officers and information regarding their interests in the proposed
transaction will be included in the proxy statement for the
proposed business combination.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction. This press release shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any states or jurisdictions in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such state or jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of section 10 of the Securities Act of 1933, as
amended.
Forward Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. The expectations,
estimates and projections of the businesses of the Company or
Syniverse may differ from their actual results and consequently you
should not rely on these forward-looking statements as predictions
of future events. Words such as “expect,” “estimate,” “project,”
“budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,”
“will,” “would,” “could,” “should,” “believes,” “predicts,”
“potential,” “continue,” and similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements include, without limitation, expectations with respect
to future performance of the Company and Syniverse and anticipated
financial impacts of the proposed transaction, the satisfaction of
the closing conditions to the proposed transaction and the timing
of the completion of the proposed transaction.
These forward-looking statements are not guarantees of future
performance, conditions, or results, and involve significant risks
and uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside of the control of the Company and Syniverse and are
difficult to predict. Factors that may cause such differences
include, but are not limited to: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the agreement and plan of merger with respect to the
proposed transaction (the “Merger Agreement”); (2) the outcome of
any legal proceedings that may be instituted against the parties
following the announcement of the Merger Agreement and the proposed
transaction; (3) the inability to complete the proposed
transaction, including due to failure to obtain approval of the
stockholders of the Company or other conditions to closing
contained in the Merger Agreement; (4) the occurrence of any event,
change or other circumstance that could give rise to the
termination of the Merger Agreement or could otherwise cause the
proposed transaction to fail to close; (5) the receipt of an
unsolicited offer from another party for an alternative transaction
that could interfere with the proposed transaction; (6) the
inability to obtain or maintain the listing of the post-acquisition
company’s common shares on the New York Stock Exchange following
the proposed transaction; (7) volatility in the price of the
Company’s securities due to a variety of factors, including changes
in the competitive industries in which Syniverse plans to operate,
variations in performance across competitors and changes in laws
and regulations affecting Syniverse’s business; (8) the risk that
the proposed transaction disrupts current plans and operations of
Syniverse as a result of the announcement and consummation of the
proposed transaction; (9) the ability to recognize the anticipated
benefits of the proposed transaction, which may be affected by,
among other things, competition, the ability of the combined
company to grow and manage growth profitably, maintain
relationships with customers, vendors and suppliers and retain its
management and key employees; (10) costs related to the proposed
transaction; (11) changes in applicable laws or regulations; (12)
the possibility that Syniverse may be adversely affected by other
economic, business, financial, political, legal and/or competitive
factors; and (13) other risks and uncertainties indicated from time
to time in the Company’s Quarterly Reports on Form 10-Q and the
proxy statement discussed above, including those under “Risk
Factors” therein, and other documents filed or to be filed with the
SEC by the Company.
The Company cautions that the foregoing list of factors is not
exclusive. You should not place undue reliance upon any
forward-looking statements, which speak only as of the date made.
Syniverse and the Company do not undertake or accept any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in their
expectations or any change in events, conditions or circumstances
on which any such statement is based.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210816005741/en/
Media and Press: David Millar /
Kelsey Markovich Sard Verbinnen & Co.
syniverse-svc@sardverb.com +1.212.687.8080
Caitlin Epstein Twilio press@twilio.com
+1.314.952.1116
Investor Relations: Stanley
Martinez, CFA, IRC Syniverse ir@syniverse.com
+1.813.614.1070
Kristin Celauro M3-Brigade Acquisition II Corp.
kcelauro@m3-partners.com +1.212.202.2223
Andrew Zilli Twilio azilli@twilio.com +1.805.705.4492
M3Brigade Acquisition II (NYSE:MBAC)
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