Neustar To Be Taken Private In $2.9 Billion Bid By PE Firm Golden Gate Capital

neuNeustar has been acquired by a group of investors led by private equity firm Golden Gate Capital for $33.50 per share in a deal valued at $2.9 billion, including debt, the company revealed Wednesday. [Here’s the release.]

This transaction encompasses all assets of Neustar, which had been edging toward a split into two publicly traded companies: one focused on the company’s legacy number-portability business and the other on information security and marketing services.

Golden Gate Capital and GIC Private Ltd. “recognized the complementary nature of [Neustar’s] assets and businesses,” said a source with knowledge of the company.

That source said the capital investors shared Neustar’s vision to further its information and data services businesses as a single entity.

Neustar first revealed plans to divide its two core businesses last June. The stated goal was to clear up any confusion about Neustar’s perceived value in public markets.

“Some of our services appeal to value investors, some appeal to growth investors,” CEO Lisa Hook told AdExchanger at the time. “After a lot of thought, we decided to separate into two independent, publicly traded companies … each of which will have a very simple, pure-play story that will be easily understood by relevant investors and, we’re hoping, unlock shareholder value.”

In more recent months, Neustar struggled with go-to-market strategy and sell-in for newly acquired assets, including marketing analytics platform MarketShare. Neustar lowered its guidance last quarter and cited new client wins as falling short.

Neustar notably took a hit in July 2015 when it lost a US government services contract, which was awarded to Swedish telecommunications company Ericsson. Neustar claimed at the time the loss had no bearing on its marketing services business, which continued to grow in revenue and in the components of its marketing stack.

Like other marketing clouds that have gotten into the DMP game of late, Neustar was early to that race.

It acquired the data management platform Aggregate Knowledge in 2013 for $119 million, which acted as a complement to its TARGUSinfo acquisition in 2011. More recently it snapped up MarketShare for $450 million.

The TARGUSinfo deal provided the basis for Neustar’s audience targeting and identity solution, which more recently became known as OneID and served as the interlink between Neustar’s products.

Neustar is the latest in a long string of private equity buyouts for marketing and ad tech firms, which include Vista Partners’ investment in Mediaocean and Marketo, HGGC’s investment in StrongView, Clarion Capital’s stake in Madison Logic and Cathay Capital’s in Smart AdServer.

It’s also the second acquisition of a publicly traded ad tech firm, following Adobe’s recent $540 million deal to buy video DSP TubeMogul.

More to come.

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