UPDATE: Neustar (NSR) to Acquire Transaction Network Services in $220M Cash Deal

(Updated - September 9, 2015 4:42 PM EDT)

(Update corrects typo in headline.)

Neustar (NYSE: NSR) announced that it has entered into a definitive agreement to acquire caller authentication assets from Transaction Network Services (TNS), an affiliate of Siris Capital Group, for approximately $220 million in cash. The purchase price is effectively reduced to approximately $173 million after taking into account tax benefits resulting from the transaction.

This acquisition will allow Neustar to compete in the broad market for call authentication in mobile, broadband and wireless services with offerings that include subscriber data storage, database management, caller identification and verification services. The Company estimates that the acquired assets will generate approximately $60 million in revenue in 2016.

“With this acquisition, Neustar will be able to compete in the large and growing market for caller authentication and verification across calling platforms, both traditional and emerging,” said Lisa Hook, Neustar’s President and Chief Executive Officer. “The fundamental shift to mobile has forever changed how businesses and consumers engage, resulting in a need for creative solutions that enhance engagement in a way that must be neutral, trusted, and platform-agnostic. This acquisition expands our reach and accelerates our capability to deliver increased value to service providers, businesses, and consumers across the full spectrum of communication platforms.”

Paul Lalljie, Neustar’s Chief Financial Officer, added, “TNS’s caller authentication assets improve our ability to serve our clients by providing broader coverage. These assets generate strong profits, which are consistent with our long-term margin expectations. In addition, this asset purchase will generate estimated tax benefits of approximately $47 million, significantly improving the valuation profile of the deal.”

Neustar expects to fund the acquisition with cash on hand. The transaction is expected to close in the fourth quarter of 2015, pending Hart-Scott-Rodino approval.

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