Syniverse goes back to previous partner as it drops $2.85bn merger
Syniverse this morning dropped its plan for a US$2.85 billion reverse takeover that would have seen the company listed.
Instead, the company said that it wis stay majority-owned by the Carlyle private equity group, with a possible $750 million investment by Twilio.
Syniverse CEO Andrew Davies (pictured) – a big dealmaker from his time at Vodafone and Verizon Wireless – put a brave face on it. “Syniverse’s underlying business is incredibly strong, and we are well-positioned to capitalize on significant market tailwinds to fuel our growth as a private company,” he said.
But it means a collapse of his Plan A, which was announced it August 2021. Under that, the company was to merge with a publicly traded special purpose acquisition company (SPAC), called M3-Brigade Acquisition II Corp. That would have given Syniverse a listing on the New York Stock Exchange (NYSE) with an initial enterprise value of $2.85 billion.
M3-Brigade Acquisition II Corp is now worth $486.5 million on the NYSE, its share price having fallen from $9.99 just a week ago to $9.73 this morning.
Syniverse’s Plan B, which it calls the “Alternative Transaction”, is for Twilio to take a minority investment of up to $750 million in Syniverse.
This pushes the clock back to March 2021, five months before the M3-Brigade announcement, when Syniverse announced a plan for Twilio to “become a significant minority owner”.
Mohsin Meghji, CEO of MBAC, said: “We are disappointed that recent changes in market conditions made it impossible to consummate our proposed merger, but Syniverse is a great company with a strong management team and we are confident that it has a very bright future.”
Davies said: “We remain focused on executing our proven strategy and look forward to further investing in innovation, as well as product quality and breadth. We’re enthusiastic about writing the next chapter in the Syniverse story as we continue to provide mobile network operators and enterprises with the mission-critical connectivity and interoperability solutions they need in the evolving mobile ecosystem.”
Donald Morgan, the founder, managing partner and chief investment officer of Brigade Capital Management, said: “Nobody on the MBAC team is happy to have a failed deal and rest assured that we will have alternative sources of financing in hand for our next proposed combination.”
Syniverse had announced roaming deals with both AT&T and Verizon in the days before the now-abandoned reverse takeover.