Sonus Networks, Inc. (Nasdaq:SONS), a global leader in SIP-based communications, today announced that as part of the Company’s previously announced stock buyback program, it has agreed to repurchase approximately 7.4 million shares of the Company’s common stock in a privately negotiated transaction with Galahad Securities Limited and its affiliated entities (together, the “Legatum Group”) at $3.40 per share, the market closing price on August 22, 2013, for a total purchase price of approximately $25 million. The Company will pay for the share repurchase using cash on hand.
Prior to the transaction, as reflected in filings made by the Legatum Group with the Securities and Exchange Commission, the Legatum Group owned 67.3 million shares, or approximately 24%, of the Company’s outstanding common stock. The repurchased shares will be cancelled, resulting in 275.5 million shares of the Company’s common stock, $0.001 par value, outstanding. As a result of the transaction, the Legatum Group will own 59.9 million shares, or approximately 22%, of the Company’s outstanding common stock.
President and Chief Executive Officer of Sonus Networks, Ray Dolan, commented, “This transaction with the Legatum Group will allow us to reduce the concentration of our largest shareholder in an orderly fashion.”
The Company announced on July 29, 2013 that the Board of Directors had authorized a stock buyback program to repurchase up to $100 million of the Company’s common stock from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased will be determined by the Company's management based on its evaluation of market conditions and other factors. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The buyback program may be suspended or discontinued at any time. The buyback program will be funded using the Company's working capital. As of June 28, 2013, the Company had cash, cash equivalents and investments of $304.0 million. As of July 18, 2013, and prior to the transaction with the Legatum Group, there were 282.8 million shares of the Company’s common stock outstanding.