American Securities buys Global Tel*Link from Veritas - The Deal Pipeline (SAMPLE CONTENT: NEED AN ID?)
Subscriber Content Preview | Request a free trialSearch  

Private Equity

Print  |  Share  |  Reprint

American Securities buys Global Tel*Link from Veritas

by Meghan Leerskov  |  Published October 31, 2011 at 4:26 PM
American Securities LLC on Friday signed a $1 billion agreement to buy Global Tel*Link Corp. from rival New York buyout firm Veritas Capital, a person familiar with the matter said.

The target's owners and creditors will receive $950 million at closing and an additional $50 million if certain contingencies are met, the source said. No formal deal announcement will be issued, the source added.

Veritas declined to comment. Neither American Securities nor Global Tel*Link returned phone calls.

Veritas, an 82% owner, stands to reap more than a 325% gain on its $115 million, nearly 3-year-old investment in the Mobile, Ala.-based provider of telecom services to federal prison inmates. GS Direct LLC, an investment arm of Goldman, Sachs & Co., will earn a similar return on its $15 million outlay.

The sellers retained Goldman and J.P. Morgan Securities LLC in June to help auction the company, sources previously said. Schulte Roth & Zabel LLP was counsel to Veritas. American Securities emerged as the probable buyer some weeks ago.

New York-based American Securities, founded in 1947 by William Rosenwald, an heir to the Sears, Roebuck fortune, will put up 35% of the purchase price as equity, with Credit Suisse Group, UBS, Nomura Securities International Inc. and General Electric Co. providing senior debt, sources said..

The transaction's $1 billion face value is 6.7 times Global Tel*Link's expected 2011 Ebitda of $150 million.

Veritas and GS Direct teamed in February 2009 to buy Global Tel*Link for $345 million from Los Angeles private equity firm Gores Equity LLC. They've bolstered the company with add-on acquisitions, buying Digital Solutions Inc. in June 2010 and Public Communications Services Inc. last November.

Late last year, Veritas and GS Direct recouped their original investments via a debt funded dividend.

The sale is Veritas' second in recent weeks. In late September the firm, which invests chiefly in government contractors, completed the $960 million sale of health informatics and data services supplier Vangent Holding Corp. to General Dynamics Corp.

Veritas, which sank $157 million in Vangent four and a half years ago, garnered about a 240% profit, financial filings indicate.

In its most recent deal, in June American Securities' Nashville-based clinical services provider, SpecialtyCare, made an add-on acquisition of Advanced Perfusion Care Inc.

-- Lisa Ward contributed to this report.

Tags: American Securities | Global Tel*Link Corp. | PE | private equity | telecommunication | TMT

Meet the journalists

Meghan Leerskov

Managing Editor, Small Cap Equity Finance

Movers & Shakers

Launch Movers and shakers slideshow

Real estate investment manager Clarion Partners LLC hired Michelle Levy as chief operating officer of the client capital management group, based in New York. For other updates launch today's Movers & shakers slideshow.


Tribune spikes on Murdoch rumor

Tribune Publishing Co. shares rallied on Monday, despite the newspaper group denying Rupert Murdoch′s claim that it was headed toward a sale. More video