By Kelly Holman, The Deal
Private equity shopPerseus LLC has acquired Miramar, Fla.-based Maritime Telecommunications Network from its majority shareholder, New York private equity firm Falconhead Capital, in a secondary buyout sources valued at roughly $110 million.
Falconhead, which announced the sale Thursday, April 7, will generate a return of 5 times its $14 million investment in Maritime Telecommunications, representing an internal rate of return of more than 140%, according to sources familiar with the deal. Falconhead has owned the company for just over two years.
Maritime Telecommunications provides voice, data and Internet access services to cruise ships.
"We believe MTN is a great company with a bright future," said Curtis Glovier, managing director of Perseus, which has offices in New York and Washington.
Glovier, who said the firm was "enthusiastic" about Maritime's new cellular joint venture with Cingular Wireless, declined to comment further on the transaction.
Perseus will finance its purchase with debt from Credit Suisse First Boston, which is providing a staple financing package of roughly $80 million for the acquisition, a source said.
CSFB banker John Trousdale was also the sell-side investment banking adviser to Falconhead Capital and Maritime Telecommunications. Kirkland & Ellis LLP's Frederick A. Tanne, Markus P. Bolsinger and Jason A. Gottlieb provided legal counsel to Falconhead and Maritime. No information was available on advisers to the buyer.
The new financing will leave Maritime leveraged at around 5.5 times Ebitda on a senior debt basis, compared with leverage of 2 times Ebitda on a senior basis when Falconhead recapitalized the business in March 2004, said another buyout market source.
Falconhead's recapitalization of Maritime in March 2004 via a $20 million senior debt financing from Bank of America NA enabled it to recoup 80%, or $11.2 million, of its investment in the Florida company.
David Moross, chairman and chief executive of Falconhead, said Maritime Telecommunications represents a good growth opportunity for the buyer.
"We just structured a deal with AT&T Wireless, now Cingular, to bring cellular service to the cruise ship industry there is a lot of positive upside to that," he said.
Moreover, Moross said in an interview, one year ago Maritime signed about 90% of its client base to long-term contracts.
Dave Kagan, chief executive of Maritime Telecommunications, will remain at the helm of the business.
Officials from Irving, Texas-based private equity firm Natural Gas Partners, an energy-focused investment firm and minority shareholder of Maritime, were not available for comment by press time.
Contacts: Roy Winnick, Kekst and Company, 212-521-4842 or 4802