NEW YORK (TheStreet) -- Investment firm Marlin Equity Partners will acquire Tellabs (TLAB) in a deal worth $891 million, or $2.45 a share, a 4.3% premium on Friday's closing price. The board of Tellabs, the telecommunications company, unanimously approved the acquisition, which is expected to close in the fourth quarter.
"This transaction will deliver to Tellabs stockholders certainty of value and liquidity, immediately upon closing," said Chairman Vince Tobkin. "Tellabs' Board of Directors arrived at the decision to enter into a transaction with Marlin after a thorough review of Tellabs' strategic alternatives and after more than 30 potential buyers, both strategic parties and financial sponsors, were contacted as part of a competitive bidding process."
Shares rose more than 5% to $2.47 on Monday afternoon. The deal is seen as a lifeline for the phone equipment developer which has reported 11 consecutive quarterly losses.
The company has had a volatile year-and-a-half as two chief financial officers left successively within a month of one another, Chairman and co-founder Michael Birck retired and CEO Rob Pullen lost his battle with cancer.
TheStreet Ratings team rates Tellabs Inc as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:
"We rate Tellabs Inc (TLAB) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."