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Xura Says It's In Talks To Sell Company At $25 Per Share

Xura Says It's In Talks To Sell Company At $25 Per Share
Benzinga's M&A Chatter for Monday May 23, 2016
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Xura Inc (NASDAQ: MESG), a provider of digital services solutions, announced that it is in talks for the potential sale of the company for $25 a share, representing a premium of 26 percent over Thursday's close. On the news, the shares climbed as much as 12 percent.

The company, which also postponed the release of fourth quarter results, said it would release the quarterly results and file the annual report on or before May 2, 2016.

Meanwhile, Xura released a preliminary unaudited results for the fourth quarter, during which it generated revenue of $82 million and adjusted EBITDA of $14 million.

Related Link: Xura Reports Exclusive Negotiations For Possible Sale At $25/Share, Reports Postponement Of Earnings Release, Call

Xura said a weakness in monetization and enterprise and delays in Digital Communications revenue from legacy Acision customers offset the $197 million in annual revenue it generated from Comverse customers.

The Possibility Of A Sell

"While we firmly believe in the strategic importance of Acision to Xura, we continue to focus on maximizing stockholder value and are currently engaged in exclusive strategic negotiations for the potential sale of the company to a third party at a purchase price of $25 per share," Philippe Tartavull, president and chief executive officer, Xura said in a statement.

As of January 31, 2016, Xura had cash and cash equivalents of about $170 million.

Looking Forward

For fiscal 2016, the company expects revenue to be between $340 million and $370 million; adjusted EBITDA to be between $70 million and $85 million; and cash and cash equivalents to be between $170 million and $200 million.

Xura continues to expect an annualized run rate adjusted EBITDA of between $100 million and $120 million for the third quarter and anticipates restructuring to be largely complete by the end of the third quarter.

Shares of Xura closed Friday up 4.33 percent at $20.70.

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