October 11, 2011 / 9:00 PM / 7 years ago

UPDATE 2-NeuStar to buy Targus Information for $650 mln

* NeuStar sees deal adding at least $0.20/shr to 2012 earnings

* Sees revenue of about $750 million following the deal

* Q3 earnings tops estimates

* To buy additional $250 mln of Class A common shares

* NeuStar shares up 3 pct in after-hours trade

By A. Ananthalakshmi

Oct 11 (Reuters) - Telecommunications company NeuStar Inc is to buy privately-held Targus Information Corp, a provider of caller identification services, for about $650 million in cash to boost its presence in the real-time information and analytics market.

NeuStar, which routes phone calls and text messages in North America, expects the deal to add at least 20 cents a share to its 2012 earnings and push annual revenue to about $750 million.

Vienna, Virginia-based Targus — which helps identify, verify and locate callers, and maintains a database — generated about $149 million in revenue for the twelve months ended Sept. 30.

NeuStar, which was spun off from Lockheed Martin Corp in 1999, also maintains databases that directs communication via phones and the Internet.

“We permit the phone calls to be sent and they (Targus) enable the people who are picking up the phone to know who is calling them,” NeuStar CEO Lisa Hook told Reuters in an interview.

Hook said the companies have some customer overlap in the cable, wireless carrier and advertising industries.

When NeuStar began talking to Targus in November 2010, the target company was not pursuing a sale, Hook said.

Last year, Targus had hired Wells Fargo to conduct a sale process. But it was discontinued and the company decided to pursue recapitalization.

NeuStar expects to fund the deal with a combination of cash on hand and $600 million in committed financing.

Morgan Stanley and Allen & Co were NeuStar’s financial advisers, while Wells Fargo advised Targus.

Separately, NeuStar reported third-quarter earnings of 51 cents a share that beat analysts’ expectations by 7 cents and guided higher earnings for the year.

Revenue rose 18 percent to $152.5 million.

The company also said it plans to buy back another $250 million of its Class A common shares on an accelerated basis.

Shares of the company, which closed at $28.04 on Tuesday on the New York Stock Exchange, were up 3 percent in after market trade at $29.03.

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