Tangoe Inc (OTCMKTS:TNGO) shares were acquired for $6.50 per share in cash last week, which is odd because 6 weeks ago they had a major shareholder exit with some of the final sales coming well under $5.00.
I guess looking back at it – it makes sense that Tangoe is considering Marlin Equity Partner’s proposal to acquire all outstanding common shares of Tangoe not already owned. Often when public companies come under delist issues from the exchanges, or have a large shareholder exit for an earnings miss or other balance sheet related failures, companies can get grounded. Shares in Tangoe were near $10 in August 2016, so something was amiss.
Tangoe Inc (OTCMKTS:TNGO) is a global leader in telecom expense management solutions that enable enterprises to manage and optimize spend across multiple IT categories by providing visibility into the complex processes associated with their assets and expenses.
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“After careful consideration and deliberation, our Board of Directors concluded that the sale of Tangoe to Marlin was in the best interest of Tangoe and its shareholders,” said Jerry Kokos, Executive Chairman of Tangoe. “Given its deep bench of operational resources and excellent track record of acquiring and growing businesses in the TEM market, Marlin is an ideal partner for Tangoe. This transaction provides the opportunity for immediate and substantial value to Tangoe shareholders, while also allowing Tangoe greater flexibility to execute on its long-term strategic vision.”
At closing, Marlin intends to combine Tangoe with its existing portfolio company Asentinel, a provider of TEM software and services. The combination would create a market leader managing more than $38 billion of IT and telecom spend on behalf of over 1,300 customers worldwide. The new company would operate under the Tangoe brand with Jim Foy continuing to serve as CEO, with Tim Whitehorn, CEO of Asentinel, serving as the Chief Product Officer.
“We are excited about the opportunity to partner with Marlin and combine with Asentinel, and see tremendous benefit in combining Tangoe’s global scale and comprehensive offering with Asentinel’s heritage of technological innovation,” said Mr. Foy. “The breadth and depth of our combined product and service capabilities, delivered on a global scale, should enable us to provide a compelling value proposition to our customers,” added Mr. Whitehorn.
“We look forward to working closely with the Tangoe and Asentinel teams to develop world-class solutions and drive customer success,” said Peter Chung, a principal at Marlin. “This agreement further supports Marlin’s long-term commitment to the TEM market and the value we believe these solutions deliver to customers.”
Tangoe’s Board of Directors has approved and will recommend Marlin’s proposal to acquire all outstanding common shares of Tangoe not already owned by Marlin for $6.50 in cash per share, subject to various conditions. Under the terms of the merger agreement, an affiliate of Marlin is required to commence a tender offer to acquire all outstanding shares of Tangoe’s outstanding common stock at $6.50 per share in cash no later than May 12, 2017.
The merger agreement also provides that, promptly after the closing of the tender offer, any shares not tendered in the tender offer will be acquired by Marlin in a second-step merger at the same cash price as paid in the tender offer.
The transaction is expected to close late in the second quarter of 2017 so it is not completely out of the woods, but the selloff and exit sealed the fate of Tangoe, Inc.(NasdaqMKTS:TNGO) as a public company leaving only the option of privatization and merger. This seems a fair bailout to common shareholders as the recent selloff was a bit over done.
It is important to know when to hang on in these type of sell offs that a fair price for your common shares can come from a white knight like Marlin. Stay tuned for more privatizations as we head into the consolidation that 2017 will bring. We will continue to update you with any critical news on TNGO. For continuing coverage on shares of $TNGO stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!