Marlin Equity buys telecom provider Tangoe, following two PE fund raises

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Marlin Equity Partners has reached a deal to buy Tangoe Inc. for approximately $242.6 million in cash. As part of the deal, the firm plans to combine the target with its existing portfolio company Asentinel, a software-as-a-service (SaaS) provider of telecommunications expense management (TEM) services.

Tangoe, headquartered in Orange, Connecticut, develops software that covers: voice and data services, mobile devices and usage, cloud-based software, infrastructure services, and information technology connections. The agreement to merge Tangoe with the firm’s existing company Asentinel will create a company with more than 1,300 clients managing more than $38 billion in IT and telecom spending. From bill error and usage management to text plan changes and voice optimization, Asentinel looks for ways to help its clients reduce their telecom expenses. The newly combined company will operate under the Tangoe brand.

Marlin Equity is a Los Angeles-based investment firm with more than $6.7 billion of capital under management. In March, Marlin equity raised two private equity funds to back software companies: a flagship fund with nearly $2.5 billion in capital commitments and a small cap fund with $750 million. The firm, with an additional office in London, has completed more than 100 acquisitions since its establishment. In November 2016, Marlin Equity completed the acquisition of Edgenet, a software-as-a-service company providing product data management, and later in December unveiled a new portfolio company called Elenion Technologies.

Competition for telecommunications services has dealmakers shifting their attention. Buyers of telecom services include: Chicago-based private equity firm GTCR LLC’s purchase of Internet protocol service company Inteliquent to merge with mobile carrier Onvoy; Audax Private Equity’s acquisition of telecom data provider Mobileum; and CenturyLink Inc. (NYSE: CTL) agreement to buy Level 3 Communications Inc. (NYSE: LVLT) for nearly $34 billion.

Schulte Roth & Zabel LLP is acting as legal counsel to Marlin. Stifel Nicolaus & Co. Inc. is acting as financial adviser to Tangoe, while Wilmer Cutler Pickering Hale and Dorr LLP is acting as legal counsel. The deal, where Marlin Equity will pay $5.60 per share, is expected to close late in the second quarter of 2017.

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