Mavenir ‘checks all the boxes’ as Koch takes $500m stake
Mavenir, the open RAN company that last year abandoned a US$300 million share flotation plan, has had a $500 million investment from part of the Koch family group.
Koch Strategic Platforms (KSP), a subsidiary of Koch Investments Group that was set up last year, said it has signed an agreement for a strategic minority equity investment in Mavenir. Mavenir’s main shareholder, private equity investors Siris Capital, will remain majority holders.
Neither Mavenir nor Siris said how much of a stake Koch is buying — thereby not disclosing Mavenir’s valuation. In last year’s planned, then abandoned, initial public offering (IPO), Mavenir was originally due to sell 13.6 million shares at $20-$24 each.
But first it cut the planned sale to 12.5 million at the same price – reducing the maximum funds available from $326 million to $300 million – before dropping the idea altogether.
In a November 2020 press statement, Mavenir said: “The company has decided to postpone its initial public offering, which was announced on October 6, 2020, amid market volatility. The company will reassess the market conditions in the coming months and will keep the market informed.”
The replacement investor, Koch Industries, describes itself as one of the largest private companies in America, but it is so secretive that it doesn’t even disclose its own revenue, preferring to quote a Forbes estimate that it is “as high as $115 billion”.
Less secretly, the Koch group and its chief, Charles Koch, deny the existence of the climate emergency and in January 2021 funded the 13 Republican Party senators in the US who tried to overturn the results of the 2020 presidential election. Charles Koch is reported to have spent more than $15 million on funding those senators.
Pardeep Kohli (pictured), president and CEO of Mavenir, welcomed the investment: “We have built a next-generation software platform that has driven, and will continue to drive, the digital transformation of mission-critical networks. Together with KSP and our service provider customers, we expect to bring innovation and 5G to revolutionize industries such as energy, industrial automation, and health care.”
David Park, president of KSP, said the investor was taking “material minority equity positions in innovative, disruptive companies with strong management teams that operate in industries with significant tailwinds”, but avoided disclosing the percentage stake Koch will hold in Mavenir. “We want to partner with companies that can transform Koch Industries for the future,” said Park. “Mavenir checks all the boxes.”