Digital Colony to take Boingo Wireless private in $854M deal

An affiliate of Digital Colony Management LLC struck a definitive agreement to buy Boingo Wireless Inc. for $14.00 per share in cash, in a transaction valued at roughly $854 million.

The acquisition price, which includes the assumption of $199 million of Boingo's net debt obligations, represents a 23% premium to Boingo’s closing price of $11.40 on Feb. 26.

Boingo will become a privately held company upon completion of the transaction, which is expected to close in the second quarter, subject to the receipt of Boingo shareholder approval, regulatory approvals and other customary closing conditions.

Boingo made customary representations and warranties in the agreement and agreed to customary covenants regarding the operation of its business and the subsidiaries' prior to the effective time. Following a 25-business day go-shop period, the company is also subject to customary restrictions on its ability to solicit alternative acquisition proposals from third parties and to offer non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals, with customary exceptions for superior proposals.

The agreement also contains certain termination rights for Boingo and White Sands Parent Inc., including a requirement for the former to pay the latter a termination fee of nearly $13.1 million if the agreement is terminated by Boingo during the go-shop period to pursue a superior proposal or about $19.6 million in the event of other specified circumstances. Meanwhile, White Sands will be required to pay Boingo a termination fee of about $32.7 million if White Sands fails to complete the merger after the applicable closing conditions are met. Further, either party may terminate the agreement if the merger is not completed by Aug. 26, subject to certain limitations.

Digital Colony is a unit of Colony Capital Inc.

TAP Advisors is acting as exclusive financial adviser and offered a fairness opinion to Boingo's board with regard to the deal. In addition, Gunderson Dettmer is acting as legal counsel. Credit Suisse is serving as lead financial adviser and Truist Securities Inc. is serving as co-financial adviser to Digital Colony. Truist is leading the debt financing alongside joint lead arrangers and joint bookrunners TD Securities and CIT. Meanwhile, Simpson Thacher is serving as legal adviser to Digital Colony.