Jun 5, 2017

Exclusive: YipTV makes takeover offer for MagicJack

YipTV, a Florida-based provider of over-the-top television content, has proposed a $9.50 per share takeover offer for Israeli cloud calling company MagicJack VocalTel (Nasdaq: CALL), Axios has learned. This would represent nearly a 50% premium to where MagicJack stock opened trading this morning.

Small buying big: YipTV is a tiny company, with internal projections showing less than $10 million in expected 2017 revenue,. MagicJack, on the other hand, generated nearly $100 million in revenue last year, has over two million subscriber lines and sells product in around 25,000 retail locations. To finance the transaction, a source says that YipTV has negotiated around a $95 million credit facility from Goldman Sachs. It may also work with an equity sponsor.

Deal thesis: YipTV wants to build out a multi-line, consumer home services business, by using shared infrastructure and economies of scale. Or, put more simply: to Drive YipTV services into at least 10% of MagicJack customers. If successful, the company's internal models project a $1.5 billion exit within 24 months.

Connection: YipTV CEO Michael Tribolet once served as MagicJack's chief business officer. Tribolet declined comment on the MagicJack situation.

Background: Bank of America Merrill Lynch is running the sell-side process. MagicJack has publicly acknowledged that it is exploring strategic alternatives, and that earlier this year it rejected an $8.50 per share offer from Carnegie Technologies Holdings. It also said in mid-March that it had received a $9.50 per share offer with committed financing, although it is unclear if that bidder was YipTV (documents viewed by Axios are dated slightly later, but could simply be revisions). In any case, traders haven't been too confident in a deal getting done ― with shares never even hitting $9 this year ― although Goldman's involvement might change that.

Expand chart
Data: Money.net; Chart: Andrew Witherspoon / Axios

Go deeper

Tesla short sellers wish Elon Musk had funding secured at $420

Data: Money.net; Chart: Axios Visuals

Tesla has been among the most derided companies in the world, but CEO Elon Musk has been getting revenge against hated short sellers since the electric car company's June swoon.

Why it matters: Many probably wish Musk had taken the company private at $420 a share, as he said he would in an August 2018 tweet in which he claimed to have "funding secured" for the move.

Go deeperArrowJan 14, 2020

Elizabeth Warren on the issues, in under 500 words

Photo: Scott Eisen/Getty Images

Elizabeth Warren is a Massachusetts senator known for her consumer advocacy and efforts to regulate big financial institutions. Her brainchild, the Consumer Financial Protection Bureau, was created in 2011.

Go deeperArrowUpdated Jan 14, 2020

Fiat Chrysler and Peugeot owner PSA agree to 50-50 merger

Photo: Aytac Unal/Anadolu Agency/Getty Images

Fiat Chrysler and Peugeot-maker PSA Group of France have agreed on a binding, 50-50 merger deal, the companies said in a joint statement Wednesday.

Why it matters: The merger would lead to the creation of the world’s fourth-largest automaker by volume and third largest by revenue, with annual sales of 8.7 million units and combined revenues of nearly $189 billion, according to the statement.

Go deeperArrowUpdated Dec 18, 2019