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Twilio Could Invest $750M In Carlyle Group's Syniverse: WSJ

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Cloud communications company Twilio Inc (NYSE: TWLO) to invest up to $750 million in Carlyle Group Inc (NASDAQ: CG) owned messaging company Syniverse Technologies ahead of the latter’s potential public listing, the Wall Street Journal reports.

  • Reportedly, the investment could be followed by a merger between Syniverse and a special-purpose acquisition company (SPAC). However, there is no guarantee regarding a listing via a SPAC deal or an IPO.
  • The deal could potentially value Syniverse between $2 billion to $3 billion, including debt. 
  • Companies nowadays prefer SPACs as it enables them to go public without a business and then seek a business to merge. The resulting transaction offers the target a listing. A SPAC option is more likely as the Twilio deal can send a substantial chunk of business to Syniverse. Syniverse may also utilize the SPAC deal proceeds for acquisitions.
  • Twilio’s valuation rose from $15 billion to over $67 billion within a year from the pandemic-induced demand for cloud services. The company acquired customer-data firm Segment for around $3 billion, tapping its stock price appreciation.
  • Salesforce.Com Inc (NYSE: CRM) acquired messaging platform Slack Technologies Inc (NYSE: WORK) last year for around $27.7 billion. Such cloud computing deals with creating remote work infrastructure could pose competition to software titans, including Microsoft Corp (NASDAQ: MSFT).
  • Carlyle agreed to take Syniverse private in 2010 in a deal valued at over $2 billion which did not go ahead. However, the Twilio deal and an impending listing could work in Syniverse’s favor.
  • Price action: TWLO stock has gained 2.32% at $402 in the pre-market session on the last check Monday.
 

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