The deal will enable the wireless network data provider to go public
KORE Wireless Group has agreed to merge with Cerberus Telecom Acquisition (CTAC), a special purpose acquisition company, in a deal that values the combined company at about $1.014bn.
Based in Georgia, US, KORE Wireless is a wireless network data provider, engaged in offering internet of things (IoT) solutions and connectivity-as-a-service (CaaS).
Cerberus Telecom was formed by an affiliate of alternative investing firm Cerberus Capital Management.
The merger with the blank cheque firm enables KORE Wireless to go public. It will have a listing on the New York Stock Exchange, where it will trade under as “KORE”.
Currently, KORE Wireless provides mission-critical IoT enterprise solutions and CaaS services to over 3,600 customers globally.
It is claimed to manage more than 12 million connected devices.
KORE Wireless president and CEO Romil Bahl said: “Over the past several years, we have been expanding KORE’s capabilities to help our customers extend their digital transformations to the edge, which is the very promise of IoT.
“As the 5G revolution accelerates globally, we believe we are well-positioned to be a critical enabler in helping enterprises transform their businesses with the power of IoT solutions.”
Bahl will continue in the role of president and CEO of the combined company, post-merger.
The deal will give cash proceeds of nearly $484m to the combined company with the assumption that there are no redemptions by Cerberus Telecom’s shareholders.
The cash proceeds include a private investment in public equity (PIPE) of $225m from Koch Strategic Platforms, funds and accounts managed by BlackRock, and other institutional investors.
KORE Wireless’ majority shareholder Abry Partners and its other existing shareholders will own nearly 38.3% stake in the combined firm.
Cerberus Telecom’s shareholders will own around 36.8% stake, while PIPE investors will own close to 24.9% stake in the enlarged wireless network data provider.
Cerberus Telecom CEO Tim Donahue said: “This is a rare opportunity to partner with a proven business supported by a strong and diversified customer base. KORE is playing a critical role in the rapidly growing IoT market with meaningful organic and inorganic opportunities.
“We look forward to working closely with Romil and his talented team to provide strategic and operational counsel, as well as industry relationships, as KORE capitalizes on the global expansion of 5G.”
The deal is expected to close in mid-2021, subject to approval by shareholders of the merging firms, and fulfilment of customary closing conditions.