TNS, Inc. (NYSE:TNS) moved higher today after founder and former CEO John J. McDonnell, Jr. offered to take the company private at $20 per share through a new blank check company, Dunluce Acquisition Corporation. While the premium isn't as much as other recent acquisitions, Mr. McDonnel's past involvement with the company as founder give this transaction a good likelihood of going through quickly.
According to a letter attached to the
13D filing:
"We are pleased to present this offer to acquire all of the outstanding shares of common stock (the Common Stock) of TNS, Inc. (the Company) at a cash purchase price of $20.00 per share through a new acquisition vehicle, Dunluce Acquisition Corporation (Dunluce), a Delaware corporation. We believe that our offer is fair and in the best interest of the Company and its stockholders. This offer is fully financed and contemplates all-cash consideration predicated on all stockholders being treated equally. Our offer represents a significant premium over the trading values of the Company’s Common Stock on a 1-day (16.8%) and 30-day average closing price (17.0%) basis. This offer is made without condition, except for the negotiation of definitive documentation and the satisfactory completion of confirmatory due diligence.
Dunluce has received commitments to underwrite the entire purchase price through a combination of debt and equity. The equity for the transaction has been committed to, in its entirety, by ABRY Partners, LLC (ABRY). With $2.8 billion of capital under management, ABRY is one of the most experienced and successful private equity investment firms in North America focused on investing exclusively in the media, communications and business services industries. Since 1989, ABRY has completed over $18.0 billion of leveraged transactions and other private equity and mezzanine investments, representing investments in more than 450 media, communications and business services properties. Additionally, we have secured debt commitments from each of JP Morgan, Morgan Stanley and SunTrust to fully underwrite the debt upon closing of the transaction. Commitment letters from ABRY and each of the lenders are enclosed herewith.
Given my longstanding involvement in the Company as its founder and CEO, our financing group will be in a position to complete confirmatory due diligence and finalize a merger agreement in an expedited manner. I am aware of the Board’s desire to minimize distractions to the Company and its management and have spent considerable time with each of the financing sources discussing the business. Furthermore, each of the financing sources has performed significant due diligence from publicly available information.
At this point, all that is left to be done is to enable our financing sources to complete their confirmatory due diligence. The legal and accounting advisors to ABRY and our lenders stand ready to begin their work immediately. Additionally, we are prepared to negotiate a merger agreement concurrently with the confirmatory due diligence period." (Read More)
The transaction represents a 16.8% premium over yesterday's market price, and comes after a very volatile year for the stock; however, TNS traded as high as $22 earlier in 2006. While additional offers are not likely, shareholders may want this price to be higher. This stock is one to
keep an eye on just incase such demands are made.
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