June 21, 2016 — STERLING, Va.–(BUSINESS WIRE)–Neustar, Inc. (NYSE:NSR) today announced its intention to separate into two independent and publicly traded companies. One company will consist of the majority of Neustar’s Information Services, while the other will focus on providing Order Management & Numbering Services. Neustar intends to accomplish the separation through a tax-free spin-off.
“Five years ago, Neustar embarked on a journey to become a market-leading provider of information services, while building upon our industry leadership in Order & Inventory Management and complex real-time Numbering Services,” said Lisa Hook, Neustar’s President and Chief Executive Officer. “We have successfully executed against this strategic plan. As the market opportunities in the information services and telecommunications sectors continue to evolve, today’s announcement is the logical next step for Neustar. Each business will be better-positioned to grow as focused and sustainable companies.”
Lisa Hook, currently President and Chief Executive Officer of Neustar, will serve as President and Chief Executive Officer of the Information Services company. Paul Lalljie, currently Senior Vice President and Chief Financial Officer of Neustar, will serve as President and Chief Executive Officer of the Order Management & Numbering Services company.
“We carefully considered a variety of strategic alternatives and determined that a spin-off is the optimal path forward for Neustar. The proposed spin-off will enable Neustar shareholders to own and value each business separately, allowing each company to attract the investor base most appropriate for its distinct investment profile,” said James Cullen, Neustar’s Chairman of the Board of Directors. “This decision to separate will maximize shareholder value by providing each company with sharper strategic and managerial focus, as well as tailored capital structures and capital allocation policies. The Board is pleased to name Paul Lalljie as the new head of the Order Management & Numbering Services company. Paul brings sixteen years of unparalleled experience at Neustar, and I can think of no one better suited to lead this company in its next stage of growth.”
In addition, the existing members of the Neustar Board of Directors will move to the Boards of each company as follows:
- Joel Friedman will serve as Chairman of the Board of Directors of the Information Services company and will be joined on the Board by Paul Ballew, Mark Greene, Lisa Hook and Deborah Rieman.
- James Cullen will serve as Chairman of the Board of Directors of the Order Management & Numbering Services company and will be joined on the Board by Ross Ireland, Paul Lacouture, Paul Lalljie, Michael Rowny and Hellene Runtagh.
Neustar will name additional board directors and the remaining senior leadership of each company in due course.
Independent Companies with Greater Strategic Clarity
The Information Services company will capitalize upon client demand for Marketing, Security and related Data Services arising from the hundreds of millions of households and individuals, and the billions of devices that are constantly changing and interacting. This company will provide:
- Marketing Services, including Customer Intelligence, Activation and Measurement & Attribution.
- Security Services, including DNS Services, DDoS Protection and Domain Name Registries.
- Data Services, including Caller ID, User Authentication and Rights Management and IoT.
The revenues associated with these services increased to $470 million in 2015, with a compounded annual growth rate of 25% over the past four years. This company is expected to be re-branded, allowing it to establish an independent identity and reputation. It does not rely on any data derived from the company’s Order Management & Numbering Services activities, or NPAC Services.
The Order Management & Numbering Services company will be a leader in service fulfillment solutions helping communications service providers transform the customer experience by providing next generation services to wireline, wireless and cable communications providers, as well as to social media and messaging platforms. It will build upon its industry leadership in Order & Inventory Management and complex real-time Numbering Services as the communications industry migrates to cloud-based networks and virtualized service architectures. This company will provide:
- Local Number Portability Administration (LNPA), Number Administration and Ancillary Numbering Services, providing critical real-time numbering and routing information to over 2,000 communications service providers to ensure successful delivery of voice calls and text messages and efficient management of telephone number resources.
- Order & Inventory Management solutions that enable communications service providers to exchange Ordering & Numbering information with other providers to support the provisioning of subscribers, services, networks and devices.
The revenues associated with these services increased to $580 million in 2015, with a compounded annual growth rate of 8% over the past four years. NPAC fixed fee revenue will continue to generate approximately $496 million annually through the duration of the contract. This company is expected to retain the Neustar name and brand identity.
Additional Details
Any potential separation, which will be subject to final approval by the Neustar Board of Directors, is likely to take approximately 12 months to complete.
Completion of the transaction is subject to a number of customary conditions, including effectiveness of the Form 10 to be filed with the SEC. Additionally, as the company evaluates the preferred transaction structure, it continues to assess what regulatory and other approvals, if any, may be required to complete the transaction.
Neustar has retained J.P. Morgan as financial adviser and Gibson, Dunn & Crutcher LLP and Goodwin Procter LLP as legal counsel in connection with the proposed spin-off.
Conference Call
Neustar will discuss the transaction on an investor conference call at 8:00 a.m. (Eastern Time) today. Prior to the call, investors may access the conference call over the Internet via the Investor Relations tab of the Company’s website (www.neustar.biz). Those listening via the Internet should go to the site 15 minutes early to register, download and install any necessary audio software.
The conference call is also accessible via telephone by dialing 1-888-820-9410 (international callers dial 1-913-312-6688) and using Conference ID code 2254013. For those who cannot listen to the live broadcast, a replay will be available through 11:59 p.m. (Eastern Time) on June 28, 2016 by dialing 1-877-870-5176 (international callers dial 1-858-384-5517) and entering replay PIN 2254013, or by going to the Investor Relations tab of the Company’s website (www.neustar.biz).
Neustar will take live questions from securities analysts and institutional portfolio managers; the complete call is open to all other interested parties on a listen-only basis.
