KORE Group Holdings (NYSE:KORE) experienced a sharp rise in its share price Friday, jumping 76% after the company disclosed a definitive agreement under which Searchlight Capital Partners and Abry Partners will acquire KORE in an all-cash transaction valued at $726 million. The agreed per-share price is $9.25.
The proposed purchase price represents a 691% premium to KORE's closing share price on December 18, 2024 - the final trading day before Searchlight indicated it might pursue a full acquisition. KORE's shares had closed Thursday at $5.01.
Under the terms of the agreement, Searchlight and Abry will purchase all outstanding common stock that they do not already own. Abry currently holds approximately 28% of KORE's common stock. Searchlight owns the company's Series A-1 preferred stock, which carries a liquidation preference of approximately $275 million, and holds warrants that, on a fully diluted basis, represent the right to acquire about 14% of KORE's shares.
The Board of Directors at KORE unanimously approved the transaction, following the recommendation of a Special Committee made up of independent directors formed to evaluate strategic alternatives for the company and its stockholders. In a statement included with the announcement, Ron Totton, KORE's Chief Executive Officer and President, said, "We are pleased to have reached this agreement with Abry and Searchlight, which unlocks significant value for our stockholders at a substantial premium."
The closing of the transaction is conditioned on a number of customary approvals. It requires approval by holders of a majority of the outstanding shares that are entitled to vote. In addition, the agreement requires a separate approval by holders of a majority of votes cast by stockholders other than Searchlight, Abry, affiliated board members and certain company officers.
Regulatory clearances are also required, including notification and waiting-period clearance under the Hart-Scott-Rodino Antitrust Improvements Act and approval by the Committee on Foreign Investment in the United States. The company stated that the closing is not subject to a financing condition. KORE anticipates that the transaction will be completed in the second or third quarter of 2026. Upon completion, KORE will cease to be a publicly traded company and will operate as a privately held entity.
Summary
KORE agreed to be acquired for $726 million in cash at $9.25 per share by Searchlight Capital Partners and Abry Partners. The price implies a 691% premium to the December 18, 2024 closing price. The board and a special committee recommended the deal, which still requires shareholder and regulatory approvals and is expected to close in Q2 or Q3 2026, after which KORE will be private.
Key points
- The deal is valued at $726 million in cash at $9.25 per share, and drove a 76% intraday rise in KORE's stock.
- Abry currently holds about 28% of common stock; Searchlight holds Series A-1 preferred stock with roughly $275 million liquidation preference and warrants equating to about 14% on a fully diluted basis.
- The transaction has unanimous board approval following the recommendation of a Special Committee of independent directors; it still requires multiple shareholder approvals and regulatory clearance.
Risks and uncertainties
- Shareholder approval risk - the transaction requires approval by a majority of outstanding shares entitled to vote, and a separate vote by non-affiliated stockholders, so it may fail if those votes are not obtained. (Impact: equities and investor returns)
- Regulatory clearance risk - consummation depends on approvals under the Hart-Scott-Rodino Act and by the Committee on Foreign Investment in the United States, any of which could delay or prevent closing. (Impact: M&A process and deal timing)
- Concentration of ownership - Searchlight and Abry already hold significant economic interests in KORE, which shapes the governance and approval dynamics for the transaction. (Impact: corporate control and minority shareholder outcomes)
This report presents the material terms and approvals disclosed by KORE regarding the proposed acquisition and the immediate market reaction to the announcement.