Kore Wireless to Go Public Via Cerberus SPAC Deal
(Bloomberg) -- Kore Wireless Group Inc. has agreed to go public through a blank-check company backed by private equity firm Cerberus Capital Management.
The deal with Cerberus Telecom Acquisition Corp. values the combined company at about $1 billion, including debt, according to a statement Friday.
Kore, which is owned by private equity firm Abry Partners, helps businesses connect devices to the internet across various networks in what’s known as the internet of things, Kore Chief Executive Officer Romil Bahl said in an interview.
Kore, founded in 2003, is the latest private equity-backed business to go public via a special purpose acquisition company, or SPAC. The vehicles have been combing private equity portfolios looking for merger partners.
The deal includes a $225 million private investment in public equity from other investors including a subsidiary of Koch Industries and funds and accounts managed by BlackRock Inc.
Abry’s stake in the company will roll into the deal, the statement shows.
Cerberus Telecom is the first SPAC raised by Cerberus, a New York-based alternative asset manager. It raised $250 million in October and said it would look for targets in the information and communications technology sector.
The SPAC’s CEO is Tim Donahue, former executive chairman of Sprint Nextel and former CEO of Nextel Communications.
Cerberus co-CEO Frank Bruno is the chairman of the SPAC’s board.
Shareholders in the SPAC will own about 36.8% of the company following the deal. The transaction is expected to provide approximately $484 million of gross cash proceeds to the combined company, the statement shows.
Bahl, who will continue to run the Atlanta-based company, said the deal will reduce the company’s net debt ratio.
Health-care is now Kore’s biggest segment and it works with big medical devices companies on monitoring patients with conditions such as diabetes, Alzheimer’s and cardiac issues, Bahl said.
“Let’s say you have a device at a patient’s house like a heart monitor that has a bluetooth connection to a separate bedside monitor,” he said. “Then, you need something reading the data and then shifting it back to the hospital, and we manage all that.”
Cerberus Telecom rose 5% in after-market trading Friday. The stock closed up 2.1% to $10.27, giving it a market value of about $348 million.
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