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Carlyle Group is buying Tampa's Syniverse for $2.6 billion

Syniverse Holdings Inc. has a center in Tampa that operates 24 hours a day, seven days a week, attempting to correct cellphone network problems around the globe.

DANIEL WALLACE | Times (2007)

Syniverse Holdings Inc. has a center in Tampa that operates 24 hours a day, seven days a week, attempting to correct cellphone network problems around the globe.

In one of the biggest corporate buyouts in this area's history, the Carlyle Group is purchasing Tampa-based Syniverse Technologies for $2.6 billion in cash.

In revealing the deal Thursday, the Carlyle Group said it intends to take Syniverse private and push for continued growth in the company's niche as a major player providing text messaging services that link wireless carriers around the world.

"Syniverse is an outstanding business that plays a vital role in the mobile ecosystem globally," said James Attwood, managing director of Carlyle, the world's second-largest private-equity firm.

Syniverse typically acts as a middleman for cell phone companies, tracking customers who roam onto other carriers' networks.

Its list of mobile clients has swelled to more than 800 companies in more than 160 countries. With $483 million in revenue in its last fiscal year, it ranks among the 15 largest public companies in the bay area.

Private-equity firms like Carlyle are attracted to the industry because of the "explosive, accelerating usage of mobile Internet devices," said John Bright, an analyst with Avondale Partners in Nashville.

Tony Holcombe, Syniverse's president and chief executive, promised minimal job cuts. The company has about 1,400 employees, including 650 at its Tampa headquarters, where Holcombe says annual salaries average about $100,000.

A "very small number" of jobs connected to the public accounting side of the business will be affected, he said. But for most, including the management team, the transition will be seamless.

"The name will stay the same. The company will stay in Tampa. And virtually all employees will be doing the same thing after today as they were doing before the announcement," Holcombe told the St. Petersburg Times.

"We intend to be here for a long time, and I intend to be here for a long time."

Syniverse, formerly known as TSI Telecommunication Services Inc., was created as a unit of the former GTE to handle wireless services like tracking national and international roaming.

In 2001, after GTE had merged with Bell Atlantic to create Verizon, Syniverse was spun off as a private company so it could deal with third-party customers.

Run by a private-equity firm based in Chicago, the company was best known at the time for handling number-switching requests for most major U.S. wireless carriers.

In 2005, Syniverse went public, raising $282 million in the largest initial stock offering by a Tampa Bay public company.

Going private again is a mixed blessing.

While a potential stepping-stone for Syniverse's expansion, the deal eliminates yet another public company from Tampa Bay.

The list of public companies that have been bought or gone private in recent years includes Global Imaging, Catalina Marketing and Checkers Drive-In Restaurants.

This year alone, Walter Energy relocated its headquarters from Tampa to Birmingham, while Brazil's Gerdau SA bought the remaining shares it didn't own of Tampa-based steel producer Gerdau Ameristeel Corp., taking it private.

Among the few local buyouts to top Thursday's announcement came in 2007 when a management-led equity group bought Outback Steakhouse parent OSI Restaurant Partners for $3.2 billion.

As head of the latest company to take the privacy path, Holcombe said the chief benefit is being able to focus on long-term initiatives instead of short-term financial results to appease Wall Street investors.

Holcombe is keen on emerging markets such as India and Brazil and said North American growth has been tremendous, fueled by interest in iPhones, iPads and other smart devices.

The more consumers use their mobile device as a personal computer, the better for companies like Syniverse.

Carlyle has been aggressively seeking bargains in recent months. In July, it announced a $3.8 billion deal to buy U.S. nutritional supplements maker NBTY Inc., and this week, it agreed to pay $3.9 billion for communications cable maker CommScope.

Carlyle is paying $31 per share for Syniverse, a 30 percent premium over the company's closing price on Wednesday of $23.79.

Shares in the company spiked after the deal was announced Thursday morning and closed at $30.50 per share, up $6.71 or 28 percent.

Times researcher Carolyn Edds and Bloomberg Business News contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com.

. FAST FACTS

Carlyle Group

Business: Asset manager with $90.9 billion of assets under management within 66 funds.

History: Created in 1987. Named after the Carlyle Hotel in New York, but the firm chose to make Washington, D.C., its headquarters so it wouldn't get lost in the crowd of New York investment firms.

Employees: 880 people in 19 countries.

Portfolio: Investor in companies with a combined $84 billion in revenue and more than 398,000 employees worldwide. It has stakes in roughly 250 firms, including Dunkin' Brands, Hertz and Florida's BankUnited.

Sources: Company, Hoover's Inc., Times research

Carlyle Group is buying Tampa's Syniverse for $2.6 billion 10/28/10 [Last modified: Thursday, October 28, 2010 11:52pm]
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