Tampa telecom firm’s $2.8B merger deal is a no-go

Tampa telecom firm Syniverse’s $2.85 billion deal to go public is now off the table.

Syniverse Technologies and acquisition company M3-Brigade Acquisition II Corp (MBAC) have mutually terminated their $2.85 billion merger deal.

The deal, if successful, would have resulted in Syniverse becoming a publicly traded company and receiving $1.2 billion in cash.

The companies filed a mutual termination agreement with the U.S. Securities and Exchange Commission Wednesday. The decision to cancel the agreement was “due to unfavorable market conditions,” according to the filing. 

The decision was made before the MBAC stockholders approved the proposed merger.

“We are disappointed that recent changes in market conditions made it impossible to consummate our proposed merger, but Syniverse is a great company with a strong management team and we are confident that it has a very bright future,” Mohsin Meghji, CEO of MBAC, said in the filing. 

The filing states the rate of MBAC stockholder redemptions for the proposed transaction would have exceeded the minimum condition for closing.

“Although the parties collaboratively sought potential solutions in anticipation of high redemptions as a result of the recent turbulence in capital markets and growth stocks, these same conditions prevented the parties from reaching agreement on modifying the transaction terms,” Donald Morgan, founder and managing partner of MBAC advisors Brigade Capital Management, said in a statement. 

Leading institutional investors, including Oak Hill Advisors and Brigade Capital Management, previously committed to participate in the now-terminated transaction through Private Investment in Public Equity (PIPE) commitments totaling $265 million.  

“Nobody on the MBAC team is happy to have a failed deal and rest assured that we will have alternative sources of financing in hand for our next proposed combination,” Morgan said. 

The merger deal, which was announced in August, was initially expected to close by the end of 2021.

M3-Brigade, which has raised $400 million in its IPO last year, has until March 2023 to find another company to take public, according to the filing.