Deal comes ahead of revenue plunge due to losing lucrative contract.
Domain name and marketing analytics company Neustar (NYSE: NSR) has entered into a deal to be acquired by private equity firm Golden Gate Capital in a transaction valued at approximately $2.9 billion, including debt.
The deal comes at a pivotal time for the company, which is about to lose its $500-million-a-year Number Portability Administration Center (NPAC) contract with the U.S. government. It has been on an acquisition binge to grow revenue in anticipation of losing the contract. Among the domain name companies it has acquired are .co and Bombora Technologies (which owns ARI Services).
In June, the company announced it was going to split into two separate companies: one to hold the remainder of the NPAC contract and the other to hold the rest of its businesses.
Going private is perhaps a better way to deal with the contract fallout than splitting into two publicly traded companies. It also opens up the possibility of divesting some of its assets more easily in the future.
Shares closed yesterday at $27.65; the offer is for $33.50 per share. Shares of Neustar are up 20% to $33.40 in pre-market trading.