Tellabs (News - Alert), a designer and developer of telecommunications networking products, has entered into a definitive merger agreement with global investment firm Marlin Equity Partners, under which the latter will acquire all outstanding Tellabs shares for $2.45 per share. A major supplier of networking solutions that help network operators boost revenue, Tellabs serves telecom service providers, independent operators, MSO/cable companies, enterprises and government agencies.

"We are excited to back the Tellabs team and we view Tellabs' business as an ideal opportunity to capitalize on the growth in the telecom network equipment sector," said Nick Kaiser, partner at Marlin, in a statement. "We are committed to extending Tellabs' market leadership by continuing to make significant investments in research and development, and in providing a superior customer experience."

The price per share agreed upon in the deal is a 4.3-percent premium over Tellabs’ closing share price on Oct. 18, and 13.3 percent over the 180-day volume-weighted average closing share price on that same day. Overall, the transaction has a total equity value of around $891 million on a fully diluted basis.

The agreement has been well-received by the Tellabs camp, as the company’s board of directors unanimously approved the transaction. Tellabs’ co-founder and second-largest stockholder Michael J. Birck (News - Alert), meanwhile, has also communicated support for the transaction.

"This transaction will deliver to Tellabs stockholders certainty of value and liquidity, immediately upon closing," said Vince Tobkin, Tellabs chairman. "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.”

Tobkin went on to add that he believes this merger represents a new chapter for the company, as well as its customers, partners and employees. In particular, he expects that it will enable Tellabs to invest in key technologies for the development of future products.