Multiband Corp., a cable and satellite TV installation firm in Minnetonka, has agreed to be acquired for $116 million in cash by Goodman Networks of Plano, Texas.
Terms of the deal call for Goodman Networks to pay $3.25 per Multiband common share, redeem all outstanding preferred shares and repay Multiband’s bank debts.
The $3.25 per share offer represents a 26 percent premium to Multiband’s share price on Tuesday and a 48 percent increase over their average price over the last 90 days.
In the Star Tribune’s most recent Star Tribune 100 list of Minnesota’s largest public companies, Multiband ranked No. 52 with $305.6 million in annual revenue, up 1.8 percent from the previous year. Multiband has approximately 3,300 employees.
An acquisition of Multiband would be another example of a larger trend in which small and medium-sized public companies have found it increasingly expensive and burdensome to remain publicly traded. Multiband is also operating in an industry that is prone to consolidation.
Goodman Networks is a privately held company with $650 million in annual revenue and 1,700 employees. The company has publicly traded debt, and in an annual report filed with the Securities and Exchange Commission on April 26, Goodman Networks said it would pursue strategic acquisitions.
In the same filing, Goodman Networks said that the fragmented market for network and infrastructure service providers creates a “compelling consolidation opportunity.’’ Goodman Networks completed the acquisition of the Custom Solutions Group of Cellular Specialties Inc. for approximately $18 million in February. The deal for Multiband would be Goodman’s largest acquisition.
The agreement gives Multiband 45 days to solicit alternative bids with Goodman Networks eligible for a breakup fee of $5 million to $6 million. The deal was approved unanimously by the boards of both companies, and the deal is expected to close in the third quarter.
According to a news release issued by Goodman Networks, Multiband would be operated as a subsidiary of Goodman, and Multiband CEO James Mandel would continue to run the business.
Multiband installs satellite and cable TV for homes and apartment buildings, and also provides design services for telecommunications firms and for wind and solar energy companies.
“We are optimistic about the proposed acquisition of Multiband for several reasons,’’ a Goodman spokesman said in an e-mail to the Star Tribune. Goodman provides installation and design services for customers like AT&T and Sprint and Multiband delivers expertise in the cable and satellite space “that we believe are truly complementary.’’
Staff writer Steve Alexander contributed to this report.